Tag Archive for: first time buyer

Canada’s Public Housing Policy

Canada’s New Public Housing Strategy: What It Means for Nanaimo Buyers and Homeowners

Canada has introduced a national housing plan aimed at addressing the housing shortage and improving affordability, particularly for first-time buyers. The strategy’s goal is ambitious: to double residential construction and build up to 500,000 new homes per year over the next decade. For homebuyers and owners on Vancouver Island, BC, this could mark a turning point in housing availability, affordability, and development opportunities.

Build Canada Homes (BCH)

A key element of the plan is the creation of a new federal agency, Build Canada Homes (BCH). Its role is to:

  • Act as a public developer, building affordable housing at scale using federal and public land.

  • Provide $25 billion in debt financing and $1 billion in equity financing to support the growth of Canadian modular and prefabricated housing industries.

  • Offer long-term land leases and support innovative building methods that reduce construction time, cost, and environmental impact.

BCH will function independently from the Canada Mortgage and Housing Corporation (CMHC), allowing it to focus on rapid delivery of affordable housing, while also supporting job creation in construction and skilled trades.

Supporting Policies: Public Lands and the Housing Accelerator Fund

The federal government is also unlocking hundreds of surplus federal properties through the Public Lands for Homes Plan. These lands will be repurposed for affordable housing development, often under long-term leases to keep costs down. The goal is to build 250,000 units on public land by 2031.

In addition, the Housing Accelerator Fund continues to support municipalities—like Nanaimo—that are streamlining their zoning and permitting processes to encourage more housing development. The fund is expected to help generate up to 750,000 new homes nationally over the next decade.

What This Means for Nanaimo

More housing supply could create better buying opportunities in the Nanaimo area, especially for first-time homebuyers who have struggled with rising prices and tight inventory. Prefabricated and modular home construction could become more common, reducing build times and improving affordability in local developments.

With increased federal investment in skilled trades and materials like mass timber and softwood lumber, Vancouver Island’s forestry and construction sectors may also benefit from renewed growth and employment.

Builders and developers in Nanaimo could also access low-cost financing, land leases, and BCH partnership opportunities to bring more housing to market faster—particularly mid-density and multi-unit projects that align with municipal zoning reforms.

Considerations for Buyers and Homeowners

While the policy direction is promising, actual housing starts across Canada are still well below what’s needed to meet demand. Federal and provincial coordination, along with private-sector participation, will be critical to turning plans into results.

For buyers, especially those in Nanaimo looking to enter the market, the introduction of more affordable housing could ease price pressure over time. For current homeowners, now may be an ideal time to evaluate refinancing options while interest rates stabilize and before new supply potentially affects market dynamics.

Key Takeaways for Mortgage Clients

  • First-time buyers should stay informed about new developments supported by BCH or municipal initiatives that could expand local housing options.

  • Homeowners may benefit from refinancing ahead of broader market shifts as new inventory begins to roll out.

  • Builders and investors should monitor opportunities tied to federal land leases and modular housing financing.

Conclusion

Canada’s new housing strategy is a significant step toward restoring balance in the housing market. In cities like Nanaimo, where affordability and supply have become growing concerns, this federal initiative could open doors for new buyers, expand construction capacity, and improve housing affordability over time.

As these changes take shape, mortgage professionals play a vital role in helping clients make well-timed, informed decisions—whether buying, refinancing, or investing in the local housing market.

What Rate Cuts Mean to Borrowers

CMLS Aveo 40 Year Mortgage

 

 

 

 

 

First-Time Home Buyers 30-Year Insured Mortgage

Unlocking Homeownership: Canada’s New First-Time Home Buyers 30-Year Insured Mortgage 

As home prices continue to rise, it can feel nearly impossible for first-time buyers to break into the market. The 30-year insured mortgage is a game-changer for young Families, and first time buyers trying to purchase their first home, especially in cities where prices have skyrocketed. By reducing monthly payments, it can ease the financial strain and help buyers afford homes they might have once thought out of reach.

Mortgage payments are stretched over a longer period (30 years instead of the typical 25 years). This makes monthly payments more affordable by reducing the amount you have to pay each month. For many, this could significantly ease the financial pressure of homeownership.

However, as with any financial commitment, it’s important for potential homeowners to understand the trade-offs, particularly when it comes to paying more interest over time. For those who can manage the long-term plan, it offers a much-needed pathway to homeownership in today’s competitive market.

Insured Mortgage: Canadian Mortgage and Housing Corporation (CMHC), Sagen or Canada Guaranty offer mortgage insurance. This provides protection for the lender in case of default on the mortgage, which means they offer their best mortgage interest rates. The downside for the buyer? You’ll pay a slightly higher mortgage insurance premium than you would on a 25 year mortgage (.20% above a 25 year amortization mortgage) which is calculated on the mortgage amount, and is included in your total mortgage amount. A few extra costs, but the overall impact on affordability can be worth it.

Eligibility Criteria?

To take advantage of this program, you’ll need to meet a few basic criteria:

  • First-time buyer: You have never owned a home or haven’t owned a home in the past four years. Nor have you occupied a home as a principal place of residence you or your Spouse have owned in the last four years. You may qualify if you did own but recently experienced a breakdown of marriage/common-law partnership.
  • Stable income: You need to prove that your household income is sufficient to manage the new mortgage, credit needs to be strong with timely repayment of debts, and the lower the debt load the better.
  • Property cap: $1,500,000 maximum Purchase price

Benefits

  • The Unique Benefit of the extended amortization is that only one borrower on the mortgage needs to be a first-time buyer to qualify. That means a parent can be cosigning for first time buyer child (or vice versa).

  • Lower Monthly Payments: Stretching out your mortgage means you won’t have to pay as much every month. This could free up extra money for other priorities like childcare, education, or savings.

  • More Home for Your Money: With lower monthly payments, many first-time buyers can afford a larger or more desirable property than they could with a traditional mortgage term.

  • Stability and Peace of Mind: A 30-year term can provide longer-term financial stability. With a more affordable monthly payment, families may have a better chance of weathering financial challenges in the future.

Potential Drawbacks

  • Higher Total Interest: While monthly payments are lower, you’ll pay more interest over the life of the loan because repayment is extended over 30 years. For those who are able, paying off the mortgage faster can reduce the total interest paid.

  • Mortgage Insurance Premiums: To protect lenders, CMHC (or Sagen or Canada Guaranty) require that a mortgage insurance premium be paid by the buyer. While this helps the affordability of monthly payments, it adds to the overall cost.

  • Qualification Hurdles: While the program is designed to help, qualifying may still be challenging for some families due to strict qualification requirements and regional property caps.

What Does This Mean for Young Canadian Families?

What difference will the 30- year amortization make to the bottom line–payments, and buying power for those trying to get into the housing market? Let’s look at a couple of options, and consider households that don’t have any debt, and have some savings put away for their home purchase.

Example: buying a condo with a purchase price of $549,000

25-year amortization: Down payment $29,900 Default Insurance Premium: $20,764 Payment: $2896/month Estimated household income required: $125,000/yr

30-year amortization Down payment $29,900 Default Insurance Premium: $21,803 Payment: $2693/month, Estimated household income required $117,400/yr

Consider combined household income amount of $100,000/year:

Another way to look at things would be from qualification standpoint. Let’s assume a household income of $100,000. With the old rules of a maximum amortization of 25 years for insured mortgages, these first-time buyers could qualify for a maximum purchase price of approximately $430,000. With a 30-year amortization these first-time buyers can qualify for $453,000 purchase price. (Scenario considers condo purchase with taxes and strata fees estimated for illustration purposes).

Do you want to see what these changes can mean for you?

Give your Broker a call and we can answer any questions you may have.