New buyers catch a break on newly built homes.

Adding to the first-timer toolbox.

Even just for newly built homes, a 30-year loan length can help more Canadian home seekers live their dreams.

It adds to a lineup of other available programs and rebates, such as the First Home Savings Account (FHSA) and RRSP Home Buyer's Plan (HBP), designed to help potential buyers gain enough down payment.

This rule may also aid those who bought pre-construction a while ago — only to find their mortgages have grown beyond their affordability numbers by the time their home is ready due to today's higher rates and home values.

Extending the amortization by 5 years can help bring numbers back in line for mortgage approval. (Next, they could be measuring their windows for blinds.)

Gaining buyer breathing-room for minimal impact on home prices.

In higher-priced markets, like Vancouver and Toronto, some first-timers don't have a choice but to save up for a 20% down payment to enter the market.

If they can't meet affordability ratios no matter where they are, they continue renting, which makes it harder to save up for a down payment, considering the sky-high rents many Canadians are currently paying amid a nationally historic low 1.5% vacancy rate.

"By applying this rule for new construction and first-time home buyers, I don't believe it will drive up home prices that much," says True North Founder and CEO Dan Eisner. "Don't forget, right now, they're renting. Being able to move into their own home will free up rental properties, help alleviate rent prices, and encourage new housing construction, which Canada desperately needs amid a chronic supply shortage."

In the most expensive major centres, new construction for less than $1M can likely be found the further away from the centre you go.

Dan suggests that "there are many Canadian centres that are popular but more affordable, like Calgary — where new housing construction has been more active recently — that could offer plenty of opportunity for new buyers to take advantage of the 30-year stretch for affordability."

Are you eligible for the 30-year limit?

First, you'll need to qualify as a first-time home buyer (as per Canadian government requirements):

• At least 18 years old (or 19, depending on your province)
• A Canadian resident
• You haven't owned or jointly owned a qualifying home that you lived in during that calendar year or at any time in the preceding 4 calendar years
• You must intend to occupy the home as your primary residence within one year of purchase

As for 'qualifying homes' that will meet eligibility, so far, the government has only identified 'newly built homes,' which suggests homes that are fresh off the construction line and never occupied, pre-construction or under construction, and will likely apply to single and multi-unit dwellings.

The 2024 Budget will be tabled on April 16, and there is likely yet to be coordination between OSFI (Office of the Superintendent of Financial Institutions), CMHC, and lenders regarding the exact details of this 30-year limit exception for insured mortgages. Check back for updates!

Here's an example of your payment difference.

For a $500K mortgage, a minimum 5% down ($25K, comes with a $19K insurance premium added to the mortgage), and a 5-year fixed rate of 5.0%:

25-year amortization: Monthly mortgage payment – $2,873

30-year amortization: Monthly mortgage payment – $2,636

That's a monthly payment difference of $237, which adds up to over $14,000 less mortgage payment required over your 5-year term.

Keep in mind that with a longer amortization, you'll pay more interest over the life of your mortgage — though you can choose to pay down your mortgage faster or reduce your amortization to make up the difference in the future.

Want to know your numbers? Contact a True North broker today by phone, email, or apply online.

Measure out more savings with our lower rates.

A 30-year mortgage length may also help improve your first-home affordability numbers, lowering the income needed to qualify for a certain mortgage amount.

Another important factor to help you qualify? Your best-possible mortgage rate.

No matter your rate, you'll still need to qualify using the federal mortgage stress test (a minimum of 5.25% or your contract rate plus 2.0%, whichever is higher), so your lowest rate can help you lower your payment even more and save thousands.

We make it easy. There's a lot to know as a first-time buyer (and several programs and rebates to help clear the financial hurdle).

Check out our first-time home buyer's guide, and call your personal guide (your friendly, highly trained True North Mortgage broker) for a smooth process that gets you in your front door.

Anywhere you are in Canada, we put you first for the ultimate mortgage experience — and we have the most 5-star reviews in the industry to prove it. Give us a shout today!