First Time Buyers In Canada Can Get Up To A 30-Year Mortgage On New Homes

first time home buyer and 30 year mortgage

Buying a new home is a dream come true for many in Winnipeg, but being able to afford the monthly payment can't be overlooked. As the demand for houses increases along with their cost, a new option is available for first-time homebuyers in Canada. They may qualify for a 30-year mortgage. The longer period to pay it off would lower the monthly payment.

Praise For This Movement

Economic experts and consumers praise this moment. The change will begin in Ottawa and is expected to be further expanded. The goal is to make this 30-year option available for people in all areas of Canada, making owning a home reasonable and affordable. This change can help households buy a home rather than continuing to pay rent.

Economic Value

With more opportunities around Canada, owning a home shouldn't be out of reach. This change will improve Canada's economic elements. It will help reduce the housing crisis because when more people can afford a home, more rental properties will be available to those needing a place to live.

Extending the mortgage length from 25 to 30 years will change the game for construction. There will be a higher demand for new homes in areas of Canada. This will help the economy due to all the entities involved with building a house. This includes construction crews, materials, interior design, and much more. The goal is an additional 5 million homes in the next 10 years.

Effective Date

This change will be effective August 1st, 2024, and it only applies to new homes built and first-time homebuyers. The shortage of affordable housing options and the cost of rent are driving forces behind this change. It isn't practical to expect the average family to have more than 20% to put down on a home loan.

Extending the home loan length takes some of the financial burden off their shoulders. It means more families will buy a new home sooner than they otherwise would have. Expects believe it will also reduce the number of home loans that go into foreclosure because the monthly payment is lower.

The government is raising the RRSP amount a first-time homebuyer can withdraw from $35,000 to $60,000, effective April 16, 2024. This change reflects the growing downpayment amount for a new home.

Another change with RRSP withdrawals is that those who withdrew between Jan 1st, 2022, and Dec 31st, 2025, will have up to 5 years to repay the money instead of the previous 2 years.

More Changes Possible

Advocates are pushing for this change to take place all over Canada. They want to expand it to include pre-existing homes, not just new-build homes. They argue that it takes time to build a new home, significantly longer than closing on an established one. They also point out that in parts of Vancouver and Toronto, there are few options for locations for new-build homes. Luckily in Winnipeg there is plenty of land for new builds. It is also practical to offer a 30-year mortgage for a pre-existing home.