For many Canadians, the dream of homeownership has become increasingly elusive. Rising property prices have created significant barriers, and millennials and Gen Z feel this burden most acutely.
Today, the federal government announced a bold plan to address this challenge. Chrystia Freeland, Deputy Prime Minister and Minister of Finance, unveiled groundbreaking mortgage reforms.
Effective December 15, 2024, these changes represent a commitment to a fairer housing market. The government’s vision is to build a brighter future for every generation.
The federal government has raised the insured mortgage price cap from $1 million to $1.5 million, easing the financial strain on prospective buyers and significantly reducing upfront costs.
For example, a home valued at $1.4 million now requires a much smaller downpayment. Buyers can save up to $165,000 on this cost, significantly benefiting first-time buyers and young families.
The government also introduced 30-year amortizations for first-time buyers and new builds. This change reduces monthly mortgage payments by hundreds of dollars, providing families more financial breathing room.
“We’re allowing families to pursue homeownership without sacrificing quality of life,” Minister Freeland said.
Another reform will make it easier to switch lenders at mortgage renewal. Borrowers will no longer face the stress test when switching lenders, which will encourage competition and offer better terms for Canadians.
These reforms are part of a broader plan to address the housing crisis. The government plans to build 4 million new homes to tackle supply shortages. It will also implement policies to protect renters and help them save for down payments.
“Homeownership should not be a privilege for the few,” Minister Freeland stated.
“These reforms unlock that dream for younger generations.”
The barriers to homeownership for Millennials and Gen Z have been particularly steep. Rising costs and stagnant wages have created financial hurdles.
Many young Canadians need more time to buy homes or settle far from their workplaces.
The typical cost of a home in Canada has significantly increased by over 50% in the last decade, and urban centers have seen even more significant increases. These trends have disproportionately impacted younger Canadians.
The reforms address these challenges by lowering upfront costs and monthly payments. Increasing housing supply is also a critical part of the strategy.
This announcement is just the beginning. The 2024 Fall Economic Statement will include more measures to expand the government’s affordability strategy.
The broader housing plan includes several highlights. The government aims to build 4 million homes by 2030 to balance supply and demand. It will strengthen tenant protections and ensure fair rental practices.
Programs like the First Home Savings Account (FHSA) will help renters save for down payments.
The mortgage reforms represent a decisive step toward making homeownership achievable. They tackle both affordability and accessibility issues in the housing market. Canadians will benefit from a more equitable landscape.
Provincial and municipal partners are encouraged to join these efforts. Collaboration across all levels of government is essential. Together, these policies can create meaningful change.
The government’s message is clear: homeownership should be within reach. By reducing financial barriers, the dream of owning a home is alive again. Canadians of all ages can look forward to a fairer housing market.