Freeland Announces Housing Affordability Measures for Canadian Homeowners

Image: THE CANADIAN PRESS/Adrian Wyld

Chrystia Freeland, Deputy Prime Minister and Minister of Finance, has announced significant changes to the Home Buyers’ Plan and the Canadian Mortgage Charter. These measures, which will be included in Budget 2024, aim to make homeownership more attainable for first-time buyers and provide relief to existing Canadian homeowners.

Freeland expressed the government's commitment to making homeownership more achievable for younger Canadians, stating, "We have a plan to build a Canada that works better for you, where you can get ahead, where your hard work pays off, and where you can buy a home."

​​ The limit for the Home Buyers’ Plan, which allows Canadians to withdraw from their Registered Retirement Savings Plan (RRSP) for a downpayment, will be raised from $35,000 to $60,000. This increase acknowledges the higher costs and longer saving periods associated with purchasing a home today.

Additionally, the government's FHSA, launched a year ago, has seen over 750,000 Canadians opening an account. With an annual contribution limit of $8,000 and a lifetime limit of $40,000, the FHSA, in conjunction with the enhanced Home Buyers’ Plan, aims to make downpayments more accessible.

An Extended Mortgage Amortizations for First-Time Buyers was also announced. To assist younger Canadians in affording their first home, the government will allow 30-year mortgage amortizations for first-time home buyers purchasing newly built homes, effective August 1, 2024. This extension is expected to lower monthly mortgage payments and encourage new housing supply.

Sean Fraser, Minister of Housing, Infrastructure and Communities, highlighted the impact of the measures, saying, "These measures are going to make it easier for young Canadians to save for their first home, and help bring down their monthly mortgage costs for new builds."

Moreover, the Canadian Mortgage Charter will include provisions for permanent amortization relief for existing homeowners who meet specific criteria. This relief will enable eligible homeowners to reduce their monthly mortgage payments to a manageable amount for an extended period.

Canadians who withdraw from their Home Buyers’ Plan between January 1, 2022, and December 31, 2025, will have their repayment grace period extended by three years, allowing them up to five years before starting repayments. This measure is designed to ease the financial burden on recent and upcoming first-time home buyers.

The federal government emphasizes the need for collaboration with provinces, territories, cities, towns, the private sector, and non-profits to address Canada's housing challenges. By working together, the goal is to ensure affordable housing for all Canadians.