Mortgage changes will give ‘extra incentive’ to build homes faster: Freeland

Finance Minister Chrystia Freeland clarified new downpayment rules for the larger insured mortgage cap on Tuesday, one of the proposals she claims will help improve affordability.

The Liberal government’s latest efforts to make it easier for young Canadians to buy a home will also help fix the housing supply crunch, Finance Minister Chrystia Freeland argued Tuesday.

The deputy prime minister spoke to reporters about last week’s announcement that Ottawa would make 30-year mortgage amortizations available on all new builds and for all first-time buyers, as well as proposals to raise the price cap on insured mortgages to $1.5 million, up from the current $1 million.

The moves have been positioned as a way to make it easier for Canadians who are boxed out of the ownership market to qualify for a mortgage and to reduce the size of their monthly payments.

Freeland reiterated Tuesday that the Liberal government is trying to give extra support to young Canadians and those struggling with unaffordable housing with borrowing costs and home prices still holding high.

“It is absolutely essential that the dream of homeownership be a reality for young Canadians,” she said.

“We are, quite intentionally, giving them an advantage, giving them a leg up in the property market.”

But Freeland was also asked if she had considered whether Ottawa’s latest proposals to add more buyers to the mix would just end up driving home prices higher as competition intensifies over properties in the market.

She said that the Liberal strategy was “carefully targeted” on first-time buyers, citing last year’s launch of the first home savings account aimed at helping young Canadians save for a downpayment.