30-Year Amortizations for First-Time Home Buyers

Magnolia Group Realty is excited to share recent updates from the Government of Canada on new mortgage guidance aimed at helping first-time buyers achieve their dreams of homeownership.

The federal government has announced that, starting August 1, 2024, lenders can offer 30-year amortizations for insured mortgages on newly constructed homes. This initiative makes monthly payments more affordable, giving younger Canadians an easier pathway to owning their first home. Read the full press release here.

Highlights of the Announcement

• Lower Monthly Payments for First-Time Buyers
  Extended amortizations by five years allow first-time homebuyers to enjoy more manageable monthly payments when purchasing a newly built home.

• Encouraging New Construction
  This measure not only supports new homeowners but also incentivizes the building of more homes, addressing housing supply shortages. Aligned with the Canadian Mortgage Charter These changes complement other government initiatives aimed at supporting generational fairness in the housing market and providing tailored mortgage relief.

Eligibility Requirements

Borrowers must meet the following criteria to qualify for a 30-year amortized mortgage:

1. First-Time Homebuyer Status:

   At least one borrower on the mortgage application must qualify as a first-time homebuyer. To meet this requirement, a borrower must satisfy one of the following:

   • They have never owned a home.
   • They have not occupied a home they or their spouse/common-law partner owned as their primary residence in the last 4 years.
   • They have recently experienced the breakdown of a marriage or common-law partnership (following CRA’s Home Buyers’ Plan criteria).

2. Purchase of a Newly Constructed Home:
   The property must be a newly built home that has not been previously occupied for residential purposes. This includes newly constructed condominiums with interim occupancy periods.

3. High-Ratio Mortgages Only:
   This measure applies exclusively to high-ratio mortgages (loans exceeding 80% of the home’s value) for owner-occupied properties. All other government-guaranteed mortgage insurance criteria remain in effect.

4. Effective Date:
   These new 30-year mortgages will be available for mortgage insurance applications submitted on or after August 1, 2024. Eligible buyers can expect lenders to roll out the offering on this date. Supporting Generational Fairness Building on the success of programs like the Tax-Free First Home Savings Account (FHSA), which has helped more than 750,000 Canadians save for a down payment, this measure is another step towards making homeownership attainable for young Canadians.

With Magnolia Group Realty, we’re here to help you understand and navigate these opportunities. From personalized advice to expert guidance on eligibility, we’ll ensure you take full advantage of every available program.

Contact us today to learn more about how this program and other initiatives can help you achieve your homeownership goals.

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