Toronto 
In an effort to alleviate the growing challenge of homeownership among young Canadians, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, today unveiled key updates to be included in Budget 2024 aimed at assisting first-time homebuyers.
These initiatives include enhancements to the Home Buyers’ Plan and the Canadian Mortgage Charter, designed to make the dream of owning a home more attainable:
- Extended Mortgage Amortization: Starting August 1, 2024, first-time homebuyers purchasing newly built homes will be eligible for 30-year mortgage amortizations. Feds says this extension will make monthly mortgage payments more affordable and stimulate the construction of new homes.
- Increased RRSP Withdrawals: The government proposes to raise the Home Buyers’ Plan limit from $35,000 to $60,000. This federal scheme allows individuals to withdraw from their Registered Retirement Savings Plans (RRSP) for a first home purchase, enhancing the capacity to save for a down payment through the tax advantages of RRSP contributions.
- Extended Repayment Grace Period: Canadians withdrawing from their Home Buyers’ Plan between January 1, 2022, and December 31, 2025, will benefit from an extended repayment grace by three years for a total period of up to five years, aiding first-time homebuyers to prioritize their mortgage payments.
- Amortization Relief: Budget 2024 will incorporate updates to the Canadian Mortgage Charter, introducing permanent amortization relief for eligible homeowners. This relief allows for the reduction of monthly mortgage payments to manageable levels, aiming to provide stability to those at risk of losing their homes.
The federal government says the increased RRSP working in tandem with the newly introduced Tax-Free First Home Savings Account, will help make saving for a down payment more accessible.
“We have a plan to build a Canada that works better for you, where you can get ahead, where your hard work pays off, and where you can buy a home. Faced with a shortage of housing options and increasingly high rent and home prices, younger Canadians understandably feel like the deck is stacked against them,” said Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announcing these measures.
“We are changing that. What we are announcing today will make a downpayment much more attainable for younger Canadians. And by extending amortization, monthly mortgage payments will be more affordable for young Canadians who want that first home of their own.”
