Pros:

• Lower Monthly Payments: Extending the amortization period to 30 years reduces the monthly mortgage payments, making them more attainable for first-time buyers.
• Increased Affordability: This change can help more people qualify for mortgages, especially in high-cost housing markets, by lowering the debt-to-income ratio.
• Encourages Homeownership: By making it more affordable to buy a home, this policy aims to increase homeownership rates among younger Canadians.

Cons:

• Higher Total Interest Paid: Over 30 years, homeowners will pay more in interest compared to shorter-term mortgages.
• Longer Debt Commitment: A longer mortgage term means a longer commitment to debt, which can impact financial flexibility and long-term financial planning.
• Potential for Higher Interest Rates: Lenders might charge higher interest rates for longer-term mortgages, which could offset some of the benefits of lower monthly payments.

Who's Eligible?

Borrowers that satisfy the following requirements will be eligible for up to 30-year mortgage amortizations:

• First-Time Homebuyer: At least one of the borrowers on an application must be a first-time homebuyer.
• Newly Constructed Home: The property that the borrower is purchasing must be a newly constructed home.
• Effective Date: This measure will be available for mortgage insurance applications submitted on or after August 1, 2024.
• Mortgage Ratio: This measure will only apply to high-ratio mortgages (mortgages where the loan amount exceeds 80 percent of the home price) on owner-occupied properties.

For more information and to find out if you're eligible, click here.