Date: April 15, 2024

Great News for First-Time Homebuyers 

Welcome Back to 30-Year Amortizations and an Increase in the FTHB RRSP Plan, 

If you or someone you know is entering the housing market for the first time, we’ve got exciting news that might make the journey to homeownership a little easier well —sort of!

The Canadian federal government announced a significant update that re-introduces 30-year amortization periods for insured mortgages, but there’s a twist—it’s exclusively for first-time homebuyers purchasing newly built homes.

Here’s what you need to know about this new 30-year amortization change:

  • The effective date is August 1, 2024.  
  • Who does this affect? 
    • First-time buyers with insured mortgages on the purchase of a newly built home 
  • Why it helps?
    • This will help decrease the monthly payment since we are now able to amortize the mortgage loan over 30 years. 
    • Let’s assume a mortgage of $500,000 with a 5-year fixed rate of 4.99%. If you took a 30-year amortization on this, you would save $239.71 per month. That’s a good chunk of change each month that can help ofset other household costs. 
  • What are the limitations?
  • Only applicable on newly built homes – we are still waiting for further definition on this. For example, if you hire a contractor to build you a home is that a newly built home or is it only the homes you buy from a new home builder? We will update you as we know more. 
  • This new 30 year amortization is great news, however it is for insured mortgages. This means the purchase price must be under $1M to qualify for insured, unless they change this in the future. 

Here’s what you need to know about the First Time Home Buyer RRSP Plan:

  • Effective April 16, the government has also raised the limit for how much first-time homebuyers can withdraw from their RRSPs to purchase a home—from $35,000 to $60,000. 
  • First-home buyers now have five years before they have to start paying back the RRSP loan, as opposed to the two years currently. 

Final Thoughts

These changes are certainly a positive development, but it often feels like the government is trying to achieve solutions without reviewing all the facts. In our role as mortgage brokers and through our advocacy work, we offer comprehensive suggestions aimed at improving conditions for Canadian homeowners. Unfortunately, the government sometimes selects only portions of these recommendations, which might align somewhat with our suggestions but don’t fully address the issues. A more universal approach, such as extending the 30-year amortization to all first-time buyers regardless of the home type, would be more effective. 

The change for allowing an extended period before starting repayment feels insufficient—like a small bonus on an otherwise unsatisfactory outcome. While I appreciate the effort and recognize it as a step forward, I believe this plan will benefit only a limited number of people. This is particularly frustrating given the large number of potential buyers struggling to enter the market due to financial barriers. So, while it’s a move in the right direction, much more must be done to make housing truly affordable for all Canadians.

Stay tuned for more updates as we continue to receive more detailed information from the government and mortgage lenders.  

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Talk soon,


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