The Canadian government will allow 30-year amortization periods on insured mortgages for first-time buyers of newly constructed homes.
Finance Minister Chrystia Freeland made the announcement Thursday in Toronto, saying the measure would come into effect on August 1.
The Canadian Home Builders Association has called for longer amortization periods, saying five extra years would help provide more stimulus and make construction more affordable.
Ms. Freeland also said the government would nearly double — from $35,000 to $60,000 — the amount first-time home buyers can withdraw from their Registered Retirement Savings Plan (RRSP) to purchase a house.
This new measure will come into force on April 16, the day the federal budget is expected to be published.
People who make such withdrawals between January 1, 2022 and December 31, 2025 also have more time to begin repayment – up to five years in total instead of two.
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