If you’re a first-time homebuyer in Ontario, the federal government just gave you two powerful new tools to achieve your homeownership dreams sooner. In an effort to tackle housing affordability challenges, Ottawa announced increases to the Home Buyers’ Plan RRSP withdrawal limits and amortization periods specifically for new construction properties.
Here’s a quick rundown of these game-changing mortgage updates and how they can benefit you as an aspiring homeowner in Ontario:
Higher RRSP Withdrawal for Your Down Payment
The federal Home Buyers’ Plan (HBP) allows withdrawals from your RRSP to use towards a down payment on your first home. As of this announcement, that withdrawal limit has been increased from $35,000 to $60,000 for those eligible.
What this means: You can now access up to $60,000 from your RRSP savings to bolster your down payment, making it easier to enter the housing market with more equity from the start. This is a tax-free withdrawal that you eventually repay over 15 years once you’re a homeowner.
Extended Amortizations on New Construction
For buyers purchasing newly built homes like pre-construction condos or townhomes, the maximum amortization period is being increased from 25 years to 30 years. This only applies to new construction properties under $1 million.
What this means: Stretching your mortgage payments over 30 years instead of 25 reduces your monthly costs, increasing the affordable purchase price for your new construction home. This helps make brand new housing stock within reach.
A Boost for Buyers and New Home Supply
In addition to giving first-time buyers higher spending power, these mortgage changes create incentives for developers to increase construction of affordable housing types like multi-unit builds and townhome communities. More buyers can qualify for these properties thanks to the lower payments from extended amortizations.
The federal government hopes these policy levers will help relieve upward home price pressures by stimulating new housing supply while giving purchasers a leg up in today’s market realities.
If you’re ready to take advantage of these opportunities or have any questions, our Mortgage Winners team is standing by to guide you through qualifying and structuring the right mortgage solution. Don’t miss this chance to get into homeownership sooner!
