Toronto 
Today, the federal government announced the details of the 30-year mortgage introduced in Budget 2024 for first-time homebuyers, which aims to make homeownership more accessible for younger Canadians.
From August 1, 2024, under the revised Canadian Mortgage Charter, first-time purchasers of newly built homes will benefit from extended mortgage amortization periods of up to 30 years.
“Canadians work hard to be able to afford a home, but the costs of a downpayment and a high monthly mortgage payment put homeownership out of reach for too many people, especially Millennials and Gen Z. First-time home buyers, especially younger Canadians, are often pushed out of the housing market due to the high costs,” said Chrystia Freeland, Deputy Prime Minister and Minister of Finance.
“ By extending mortgage amortizations to 30 years for first-time buyers on new builds, we are helping generational fairness in the housing market for younger Canadians.”
Here are the key points of the updated policy:
- Extended Mortgage Amortization: Starting August 1, 2024, the Canadian Mortgage Charter will be strengthened to permit up to 30-year mortgage amortizations for first-time buyers purchasing newly built homes. This extension from the traditional 25 years to 30 years allows for lower monthly payments, making it easier for new homeowners to manage their finances.
- Eligibility Criteria:
- First-Time Homebuyer: To qualify, at least one applicant must be a first-time homebuyer. This includes individuals who have never owned a home, haven’t owned a home in the past four years, or are recently divorced or separated under conditions recognized by the Canada Revenue Agency.
- Newly Constructed Homes: The policy applies exclusively to properties that are newly built and have not been previously occupied, aiming to boost the construction of new homes and contribute to housing supply without excessively driving up demand for existing homes.
- Effective Date and Scope:
- The new measure will take effect on August 1, 2024, and will ONLY be applicable to high-ratio mortgages, which are loans exceeding 80% of the home’s price on owner-occupied properties.
In conjunction with extended amortization periods, the government is also promoting tools like the Tax-Free First Home Savings Account to expedite the savings process for down payments and new mechanisms (to be announced) to include on-time rental payment histories in credit scoring to further aid renters transitioning to homeownership.
