In an effort to make homeownership more accessible to Canadians, Finance Minister Chrystia Freeland unveiled significant changes to mortgage rules that will take effect in December. The new measures aim to help more people, especially young Canadians, buy their first homes.
“This will bring the dream of homeownership within reach for more young Canadians,” Freeland stated during Monday’s press conference.
One of the key changes is raising the price cap for insured mortgages from $1 million to $1.5 million, the first such increase since 2012. This adjustment will allow more Canadians to qualify for a mortgage with a down payment of less than 20%.
“This will have a real impact on thousands, even millions, of Canadians,” Freeland added.
In addition to this, the government is expanding the 30-year mortgage amortization period for first-time homebuyers to include any type of home, as well as newly built homes for all buyers. On August 1, eligibility for this extended amortization period was broadened to include first-time buyers purchasing newly built homes. Freeland said these changes are a response to market realities and are designed to give new buyers an advantage.
Addressing concerns that these measures might drive housing prices even higher, Freeland explained that the increase in the mortgage price cap reflects the growth in Canada’s gross domestic product (GDP) and is necessary to keep pace with the country’s economic reality.
Justice Minister Arif Virani also introduced draft bills for a “bill of rights” for both renters and homebuyers, fulfilling a promise made in the government’s budget five months ago. These bills aim to curb practices like “renovictions,” where landlords evict tenants under the pretense of making minimal renovations, only to raise rents afterward.
The government also plans to enhance transparency by making home sales price histories available during title searches and protecting potential buyers from blind bidding, a practice that often drives up prices.
“We’re focused on ensuring a fair playing field whether you’re renting or buying a home,” Virani said.
Reaction from Local MPs
Local MPs Shafqat Ali and Ruby Sahota voiced strong support for the new measures, emphasizing the benefits for their constituents.
“These reforms are a game-changer for Brampton families who have been struggling with the rising costs of homeownership. It’s about giving young people and new Canadians a real shot at owning their first home,” said Shafqat Ali, MP for Brampton Centre.
Ruby Sahota, MP for Brampton North, also praised the initiatives, stating, “For too long, the dream of homeownership has been out of reach for so many in our community. These bold reforms are an important step in helping families build their futures and thrive.”
The government is calling these reforms the “boldest mortgage reforms in decades.” The changes come as the Liberals face growing criticism over the high cost of housing, particularly from younger Canadians, who cite housing affordability as a key concern.
Freeland confirmed she will present a Fall Economic Statement soon but did not specify a date. This move could lead to a confidence vote in Parliament, following the NDP’s decision to end its formal agreement supporting the minority Liberal government.
When asked about the possibility of a home-equity tax on primary residences, Freeland firmly stated that the government is “absolutely not” considering such a tax, despite engagement with a group that advocates for the policy.