30-year amortizations on insured mortgages for new build homes now available for first-time buyers

• By Mike Heddle
• Posted Friday, Aug 02, 2024 4:03 pm

30-year amortizations on insured mortgages for new build homes now available for first-time buyers

First-time buyers of new construction homes in Canada will now be able to access longer mortgage amortization periods. 

As of August 1st, 2024, lenders will be allowed to offer 30-year amortizations for insured mortgages to first-time homebuyers of new construction homes, a measure modified by  the federal government. Previously, the maximum amortization for an insured mortgage — a mortgage that has a down payment less than 20% and therefore requires mortgage insurance — was 25 years. Homes priced at and over $1 million automatically require a 20% downpayment and an uninsured mortgage loan. 

The federal government says that by spreading payments out over an additional five years, this will help to lower monthly mortgage payments, therefore making housing costs more affordable for young Canadians, in addition to incentivizing the construction of much-needed supply. 

“For every young Canadian who wants to own a home of their own, we want them to be able to qualify for a mortgage and afford their first home. One of the biggest hurdles to homeownership for younger Canadians is qualifying for a mortgage and affording the monthly payments,” said Chrystia Freeland, Deputy Prime Minister and Minister of Finance, in a press release. “That is why, starting August 1....[READ MORE]