In a move aimed at supporting first-time homebuyers, the Canadian government has announced changes to mortgage regulations and RRSP withdrawal limits. Finance Minister Chrystia Freeland revealed that starting from August 1, first-time buyers purchasing newly built homes will be allowed 30-year amortization periods on insured mortgages.
This decision comes after advocacy from the Canadian Home Builders’ Association, which argues that longer amortization periods would enhance affordability and stimulate construction activity.
Additionally, the government will significantly increase the amount first-time homebuyers can withdraw from their RRSPs to purchase a home. The limit will rise from $35,000 to $60,000, effective April 16, coinciding with the release of the federal budget.
Furthermore, individuals making such withdrawals between January 1, 2022, and December 31, 2025, will have an extended repayment period of up to five years, compared to the previous two years.
These measures aim to ease the financial burden on first-time homebuyers and encourage homeownership while stimulating the housing market.