Will it be easier or harder for Canadians to buy a home in 2025?
It’s been a rough few years for Canadians looking to break into home ownership as unaffordability issues persist across the country.
But as the calendar turns over to 2025, some prospective buyers might find an opportunity through changes in mortgage rules and lower borrowing costs, while some pockets of the Canadian housing market see competition — and prices — heat up.
“First-time homebuyers are going to return to the market, I think, in a big way,” Re/Max Canada president Christopher Alexander told Global News.
“And we should expect to see a much more robust year for sales as well.”
One of the big changes that could give homebuying a lift in the new year took effect in late 2024: Ottawa’s moves to expand the availability of insured mortgages and 30-year amortizations.
Now, first-time homebuyers or those purchasing a newly built home (with plans to live there) can take out a mortgage to be paid back over 30 years, rather than the typical 25. The buyer will likely end up paying more in interest costs over the lifetime of the loan, but qualifying for the mortgage will be a bit easier and monthly payments should be a bit more manageable.
The other change sees the price cap for taking out an insured mortgage rise to $1.5 million, up from the previous $1 million. This is significant because insured mortgages allow would-be homebuyers to put less than 20 per cent down on a property upfront, reducing the need to save in advance of the purchase for homes valued at up to $1.5 million.
Elliott Chun, a Realtor with Partners Real Estate in Vancouver, told Global News this month that the new rules are a “game changer” for buyers in his local market, where many homes fall within the new price limits for insured mortgages.
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