Mortgage changes aim to help first-time buyers, but draws mixed reactions

Mortgage terms expanded to aid first-time buyers The government announced mortgage changes to help first-time buyers get into the market.

The federal government announced a mortgage loan change that it says will help to loosen the tape for first-time home buyers, and while some experts say this is a step in the right direction, others believe more needs to be done.

The government is expanding its 30-year mortgage amortization to include first-time homebuyers purchasing any type of home and anyone buying a newly built home.

"It's definitely what the housing market needed at a time that's been very, very quiet,"  said Peggy Hill, CEO of the Peggy Hill Team.

Along with the Tuesday announcement, insured mortgages will also see a price cap boosted to $1.5 million from $1 million, which could allow people to qualify for a mortgage with less than a 20 per cent down payment.

"It's not more debt; it's for a longer period of time, and it's to get us through this period of time because most mortgages in Canada, five years is as long as you're going to get them. So, in five years, you requalify, you shorten your term down, and you're back on time. So it's absolutely a good thing for first-time homebuyers," said Hill.

Meanwhile, Kevin King, a broker with King Mortgages, suggested more measures could have been implemented to assist those struggling with rising housing costs.

"There hasn't been a pandemic mortgage renewal yet - in theory, they are going to start renewing in April 2025, so the government knows that they need to make some changes. I think maybe they should have thought of something like making it less costly to do a build, lot levy and permits, giving them breaks further, but they are choosing to do this," said King.

For mortgage holders like JJ Francoeur, who doesn't qualify for some of the changes, he hopes they will help his kids.

"I have two younger children who are looking to get into the market, and I think that it's something that will help them in the long run. As for people renewing mortgages or mortgages coming up, I don't think it really helps anyone, to be honest," said Francoeur.

These new changes are expected to come into effect on December 14. Many mortgage brokers say they are still waiting to learn more from the CMHC.