Some significant changes to mortgages in Canada.
This year was for first time home buyers. On August 1st, they announced that for first time home buyers, instead of only a 25 year amortization period, they would be eligible for a 30 year amortization period. Essentially, the length of time it takes you to pay off your mortgage was increased.
Therefore, the idea is to lower your monthly payments, making it easier to get into, however, the flip side is that you will also pay over a longer period of time, which means more interest over time. The idea was to get more Canadians that are first time home buyers into new builds- so they did it on new construction.
Then on September 16th, they actually expanded this. Not only first time home buyers, but buyers of all new builds are eligible for a 30 year amortization. The idea is that these will take effect on December 15th this year and hopefully get more Canadians who are first time home buyers and more Canadians into the market on new builds. It's definitely an incentive for new home builds as well- and increasing the Canadian housing supply.
So we will see how this, turns out.
For anybody who's shopping for a mortgage in the next couple of months, this is something that your mortgage broker is probably going to chat to you about.
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