Welcome to the latest episode of our Make Money Count! In this episode, we explain the recent changes in Canadian mortgage policies and their potential impact on the housing market. From the introduction of the 30-year amortization for insured pre-construction mortgages to the increasing reliance on family gifts for down payments, we’ll share everything you need to know, whether you are a homebuyer or investor.
New 30-Year Amortization for Insured Mortgage
On August 1st, the Canadian government introduced a policy allowing a 30-year amortization period for insured mortgages on pre-construction condos with less than 20% down payment. While this change aims to make homeownership more accessible, it may not significantly impact the market. The inflated prices of pre-construction condos, coupled with the ongoing challenges in securing financing, could limit the effectiveness of this policy. Moreover, the potential risks to developers and buyers alike raise questions about the long-term viability of this initiative.
The Growing Dependence on Family Gifts for Down Payments
A recent article highlights the increasing trend of first-time homebuyers relying on family gifts to cover their down payments. The average gift amounts have skyrocketed, especially in provinces like Ontario, where they reach up to $128,000. This trend underscores the challenges young buyers face in entering the housing market, as high property prices and inflexible lending criteria make it difficult to save for a down payment independently. We discuss the implications of this trend and offer advice for those steering the current market conditions.
4 Common Mortgage Mistakes to Avoid
Handling the mortgage process can be overwhelming, especially for first-time buyers. In this segment, we outline four critical mistakes that mortgage shoppers should avoid. From not securing a pre-approval before house hunting to relying on misleading pre-approvals from banks, they emphasize the importance of thorough preparation and working with knowledgeable mortgage experts. Avoiding these pitfalls can save buyers from potential headaches and financial setbacks in the future.
As the Canadian housing market continues to evolve, staying informed about policy changes and market trends is crucial for making sound financial decisions. Whether you’re a first-time buyer or an experienced investor, understanding the potential risks and benefits of these new developments can help you navigate the market more effectively. Be sure to tune in to the full Make Money Count podcast episode for an in-depth discussion, and don’t hesitate to reach out to our team for personalized mortgage advice.
