New Changes for First-Time Home Buyers: Extended Mortgage Terms

In an exciting update for first-time homebuyers, the Canadian government has introduced significant reforms to make homeownership more accessible. These changes include extending mortgage amortization periods and raising eligibility caps, offering more flexibility and affordability in the housing market. Here’s what you need to know:

1. 30-Year Mortgage Amortizations

• First-time homebuyers purchasing newly constructed homes can now access mortgages with a 30-year amortization period, up from the previous 25 years.
• Benefits:
  • Lower Monthly Payments: This adjustment reduces financial strain, allowing buyers to afford their dream homes more comfortably.
  • Improved Affordability: Buyers can qualify for larger mortgages under stress-test requirements due to the lower payment structure.

2. Higher CMHC Insured Mortgage Cap

• The insured mortgage price cap has been increased from $1 million to $1.5 million, enabling buyers in cities like Vaughan and Toronto to access a broader range of properties.
• Buyers can now purchase homes with as little as 5% down for properties under the new cap.

3. Enhanced Down Payment Programs

• The Home Buyers’ Plan (HBP) withdrawal limit from RRSPs has been raised from $35,000 to $60,000, giving buyers more resources for their down payment.
• Combined with the Tax-Free First Home Savings Account (FHSA), buyers can now save and withdraw up to $40,000 tax-free towards their first home.

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