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Great news for First Time Buyers!

New changes to help First Time Buyers with the purchase of their first home

Increase to RRSP Home Buyers Plan limit from $35,000 to $60,000

Effective April 16, 2024

For Canadians saving up for a downpayment on their first home, Budget 2024 will propose to increase the Home Buyers’ Plan limit from $35,000 to $60,000. The Home Buyers’ Plan is an existing federal program that lets Canadians withdraw from their Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home. Increasing the limit means that first-time home buyers will be able to use the tax benefits of RRSP contributions to save up to $25,000 more for their downpayment – in recognition of the fact the size of a downpayment and the amount of time needed to save up for a downpayment are much larger today. - Learn more about this program by clicking here.

Proposal to extend grace period on repayment to 5yrs for the Home Buyers plan

Proposal that Canadians who withdraw from their Home Buyers’ Plan between January 1, 2022 and December 31, 2025 will see their repayment grace period extended by three years. These first-time home buyers will now have up to five years before they need to start repayments—so they can focus on their mortgage payments and getting ahead.

Don't forget about the new - First Home Savings Account (FHSA)

The enhanced Home Buyers’ Plan will work in tandem with the government’s Tax-Free First Home Savings Account (FHSA) which allows Canadians to contribute up to $8,000 per year, and up to a lifetime limit of $40,000, towards their first downpayment. - Learn more about this program by clicking here.

Increased mortgage amortization from 25yrs to 30yrs on the purchase of a newly built home

Effective August 1, 2024

Second, to help more younger Canadians afford that first home of their own, the Deputy Prime Minister announced that in Budget 2024 the government will allow 30-year mortgage amortizations for first-time home buyers purchasing newly built homes, effective August 1, 2024. Extending the amortization limit for insured mortgages by five years for first-time buyers purchasing new builds will enable more young Canadians to afford a monthly mortgage payment and will encourage new supply.

Proposed amortization relief to those who need it

The enhancements to the Canadian Mortgage Charter will also include an expectation that, where appropriate, permanent amortization relief will be made available to protect existing homeowners that meet specific eligibility criteria. Amortization relief means eligible homeowners can reduce their monthly mortgage payment to a number they can afford, for as long as they need to. “Amortization” refers to the length of time a homeowner has to repay their mortgage; amortization relief can lower mortgage payments by stretching out this length of time. Thanks to permanent amortization relief, those homeowners who are most at risk are now better positioned to stay in their home and retain control over these important life decisions.




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