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New mortgage rules in effect for first-time buyers of new builds
The federal government’s new mortgage rules allowing new buyers more time to pay off their mortgage has come into effect starting today.
First-time buyers of new builds now have access to 30-year mortgages instead of the previous 25-year contracts. These new buyers will also have access to different insurance rates to pay back these mortgages.
The updates to the Canadian Mortgage Charter was announced in the government’s April budget, and aims to help with the housing crisis.
In an interview with CHCH, Chris Maynard from RE/MAX Escarpment Realty & Niagara said, “I think this change on insured mortgages is a good thing and should encourage more first time homebuyers to get into the market.”
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The new parameters set by the change include what defines a “first-time homebuyer” and a “newly constructed home.”
According to the government website, a first-time homebuyer is:
- someone who has never purchased a home before;
- In the last four years the borrower has not occupied a home as a principal place of residence that either they themselves or their current spouse or common-law partner owned the borrower recently experienced the breakdown of a marriage or common-law partnership;
- The borrower recently experienced the breakdown of a marriage or common-law partnership.
A newly constructed home must have not have been previously occupied for residential purposes. This is not meant to exclude newly constructed condos where there was an interim occupancy period.
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