Federal Finance Minister Bill Morneau is reportedly considering a measure for his upcoming budget that would allow first-time homebuyers to obtain 30-year insured mortgages, up from the 25-year limit now.
The Canadian Homebuilders’ Association said in media interviews that it has discussed the mortgage change with Morneau and his staff ahead of the 2019 federal budget that is expected to be delivered in March.
A 30-year insured mortgage would represent a significant change after more than a decade of measures by both federal Conservative and Liberal governments to cool Canada’s housing markets and encouraging people to take on smaller mortgage loans.
While the Bank of Canada continues to express concern about high household debt levels, federal politicians are hearing complaints from younger Canadians – a potentially key voting demographic – who say the current mortgage rules are preventing them from entering the housing market.
The upcoming federal budget will be the government’s last before the scheduled election this fall. The minister recently said he is looking at home affordability issues, but he has not publicly speculated on potential policy options that could change the current situation.
Over the past two weeks, top officials from the Prime Minister’s and Morneau’s offices have met with Kevin Lee, Chief Executive Officer of the Canadian Home Builders’ Association, to discuss potential budget measures. The association has been advocating for a return to 30-year insured mortgages for first-time homebuyers and an easing of stress test measures that restrict access to non-insured mortgages.
In media interviews, representatives with the Homebuilders’ Association said Morneau and his staff seemed receptive to changing to a 30-year insured mortgage for first-time homebuyers.
