Recent changes to Canadian mortgage funding and policies in 2024 reflect efforts to address housing affordability and market flexibility. Key updates include:
Increased CMHC Insured Mortgage Cap: The cap for insured mortgages has been raised from $1 million to $1.5 million. This change enables buyers, particularly in high-cost markets like Toronto and Vancouver, to access larger loans with as little as a 5% down payment. This adjustment aims to make homeownership more accessible in these expensive areas.
30-Year Amortizations for First-Time Homebuyers: The amortization period for insured mortgages has been extended from 25 to 30 years for first-time buyers. This reduces monthly payments, improving affordability, though it increases overall interest paid over the loan's term.
Removal of Stress Test for Mortgage Renewals: OSFI has removed the requirement for borrowers to pass the stress test when switching lenders during mortgage renewals. This change fosters competition among lenders, encouraging homeowners to seek better rates without added financial hurdles.
RRSP Home Buyer’s Plan: The withdrawal limit under the RRSP Home Buyer’s Plan has increased from $35,000 to $60,000, providing more support for first-time buyers to fund down payments.
These measures are designed to help both new buyers and existing homeowners navigate Canada’s housing challenges, though concerns remain about potential upward pressure on housing prices due to increased borrowing capacity.