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Becoming a homeowner in Canada can be challenging – especially in markets that have seen steep home value appreciations. Higher real estate prices not only raise the bar for entering the market, they also lead to lower rental vacancy rates and increased overall cost of living.
“The average age of first-time homebuyers is increasing because it takes longer for people to save for the down payment,” says Paul Taylor, president and CEO of Mortgage Professionals Canada, a non-profit association representing mortgage brokerages, lenders, insurers and industry service providers.
Across the country, there is political will to provide mechanisms for helping Canadians realize their dreams of homeownership. Among the proposed platforms are increases to the limits within the First-Time Home Buyers Incentive plan and the reintroduction of a 30-year amortization.
“Both programs are designed to help people get into the market by reducing the down payment and monthly payments,” says Mr. Taylor. Where the first-time homebuyers plan relies on a shared equity model (where the government effectively owns five or 10 per cent of the property), the alternative proposal envisions extending a mortgage from 25 to 30 years.
“In a practical sense, the results are similar, but the 30-year amortization is a simpler solution,” he says.
Produced by Randall Anthony Communications. The Globe’s Editorial Department was not involved in its creation.