The federal government has announced major updates to Canada’s mortgage policies, marking the most significant changes in decades. Among the key reforms is the increase of the insured mortgage limit from $1 million to $1.5 million. This move aims to help Canadians in high-cost housing markets, like South Surrey, access financing for more expensive properties.

Additionally, the government is broadening access to 30-year amortizations for all first-time homebuyers, not just those purchasing newly built homes. This change is designed to lower monthly payments and enhance affordability.

Previously, the 30-year amortization option was available only for new construction purchases by first-time buyers. Now, it will be accessible to all first-time buyers, offering a potential monthly payment relief of approximately $300 compared to a 25-year term, based on current mortgage rates.

The government describes these changes as part of a larger strategy to address housing affordability and to support its ambitious plan of building nearly 4 million new homes. This plan represents the most extensive housing initiative in Canadian history.

Industry professionals are optimistic about the reforms. Bruno Valko, VP of National Sales for RMG, believes that the expanded amortization periods could significantly impact affordability, potentially making homeownership more attainable for many.

Lauren van den Berg, CEO of Mortgage Professionals Canada, views the increased mortgage cap as a major victory for Canadians and is pleased with the expansion of 30-year amortizations. Jill Moellering, a mortgage planner in Edmonton, sees the changes as a positive step, although she hopes for consistency across all insured mortgages.

Despite the overall positive reception, some concerns have been raised. Critics, like Ron Butler of Butler Mortgage, argue that these reforms may not fully address the affordability crisis and could be seen as a pre-election strategy. Mortgage broker Ryan Sims cautions that extending amortization periods may increase the total cost of homeownership and suggests that revising the mortgage stress test might be a more effective solution.

The new policies will take effect in December 2024, with further details on implementation expected to follow. As the housing landscape evolves, these changes aim to make homeownership more accessible to Canadians, particularly in competitive markets.