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Mortgage Research

Mortgage Research

New Housing Measures In Federal Budget

The Government of Canada unveiled its federal budget on April 16th, 2024

As your trusted mortgage broker, we’re always on the lookout for developments that can impact your homeownership journey. This blog brings hopeful news on the housing front that we're eager to share with you.

Federal Budget & Housing Investments

On April 16th, 2024, the Government of Canada unveiled its federal that lays out the government’s bold strategy for those looking to buy a home or struggling with housing affordability. The budget is allocating billions of dollars toward the construction of new homes and supporting low-cost housing programs.

This commitment to substantial investments in housing comes at a crucial time. Canada's housing affordability crisis has been exacerbated by a rapidly increasing population and economic pressures like high inflation and interest rates — the highest we've seen in 22 years. These factors have made it more challenging for many

Canadians to find affordable homes or keep up with rent and mortgage costs.

What This Means for You

The upcoming investments aim to ease these pressures by increasing the supply of homes and making housing more accessible to everyone. This includes significant support for the construction of new homes and enhancing low-cost housing programs. 

This strategy is set to unlock 3.87 million new homes by 2031, which includes a minimum of 2 million net new homes on top of the 1.87 million homes expected to be built anyway by 2031. 

This budget also announced the new Tax-Free Home Savings Account, which is a registered savings account that allows Canadians to contribute up to $8,000 per year (up to a lifetime limit of $40,000) for their first down payment. 

To learn more about the full extent of these plans, visit The Government of Canada’s 2024 Federal Budget Report

Looking Ahead

It's important to note that while these investments are a step in the right direction, the impact won't be immediate. Canada needs to build 315,000 new residences annually through 2030 to keep pace with population growth — a challenging but necessary target to ensure a future where everyone can afford a place to call home.

Our Commitment to You

We understand that navigating the housing market, especially in times of change, can be overwhelming. We are here to help you understand what these developments mean for your individual situation and how you can leverage them to your advantage. Whether you're buying your first home, looking to invest, or exploring refinancing options, we are here to provide you with expert advice and solutions tailored to your needs.

Please reach out with any questions or for a personalized consultation. Remember, we’re more than just your mortgage broker; we are YOUR partner in making homeownership dreams come true. 

You can call (613) 962-1388 or request a free appointment at https://www.thehouseteam.ca/request-an-appointment.

Canada's banking regulator, The Office of the Superintendent of Financial Institutions (OSFI), is introducing a new portfolio test to manage the risk associated with highly indebted borrowers, especially as mortgage rates are set to potentially decrease which may make it easier for individuals to qualify for larger loans. This test will monitor banks' quarterly loan-to-income ratios, specifically focusing on ensuring that the portion of a bank’s uninsured mortgage loans exceeding 4.5 times a borrower's income remains under a certain threshold. This initiative stems from concerns that loans exceeding 4.5 times borrower income significantly increase the likelihood of default, especially in the context of the recent trend of low interest rates followed by sharp increases since spring 2022.

The portfolio test is not designed to directly impact individual borrowers' ability to secure mortgage loans. Unlike the mortgage stress test, this measure targets banks' uninsured mortgage loan portfolios as a whole rather than imposing additional requirements on homebuyers. This regulatory move is part of a series of anticipated adjustments to mortgage guidelines aimed at preventing the build-up of high-risk loans during low-interest-rate periods.

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