The federal government announced some sweeping changes to Canada’s mortgage system in an effort to improve housing affordability and access.

One of the key changes is the increase in the CMHC-insured mortgage limit from $1 million to $1.5 million. This means buyers can now qualify for a mortgage with less than a 20% down payment on homes priced up to $1.5 million, making it easier to access higher-priced properties.

This move aims to help buyers in higher-priced markets where skyrocketing housing costs have made it nearly impossible for many to qualify for insured mortgages under the previous $1 million cap.

Another major reform is the extension of 30-year amortization periods to all first-time buyers. This expansion builds on the announcement made earlier this year by the government, offering 30-year amortizations exclusively for new constructions. It is important to note that the 30-year amortization for new constructions is available to all buyers, not just first-time buyers.

The government says this change will ease the financial burden on younger buyers, allowing them to spread payments over a longer period, thus reducing monthly costs.

Both changes will come into effect December 15, 2024.

The announcement follows growing concerns about housing affordability. Deputy Prime Minister and Finance Minister Chrystia Freeland emphasized that these reforms are designed to unlock homeownership for more Canadians and address the ongoing challenges in the housing market.

“Building on our action to help you afford a downpayment, we are now making the boldest mortgages reforms in decades to unlock homeownership for younger Canadians,” she said.

The government plans to introduce regulatory amendments to implement these mortgage reforms, with more details expected in the coming weeks.

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