Uninsured borrowers see rules for switching lenders relaxed
Ottawa has announced new updates to its plan to accelerate home construction and ease borrowers’ affordability woes. Recent developments include reforms to mortgage renewal rules, tax incentives for housing construction, and efforts to curb speculative home purchases by large investors.
Starting today, uninsured mortgage holders will no longer need to pass the mortgage stress test when switching lenders at renewal, provided their loan amount and amortization period remain unchanged.
This reform, introduced by the Office of the Superintendent of Financial Institutions (OSFI), allows borrowers to shop for better rates without the added hurdle of requalification. The move aligns with existing rules for insured mortgage holders, who already enjoy stress-test exemptions at renewal.
Tax breaks for student housing
To address rising rental costs for students, the government has launched consultations to remove the GST on the construction of new student residences. Educational institutions, including public colleges and universities, are invited to provide feedback on the proposal, with submissions due by January 20, 2025.
“Building more student housing will relieve rental demand for students and confronting the financialization of housing will ensure homes are for Canadians, not a speculative asset class for investors,” deputy prime minister Chrystia Freeland said in a statement.
This initiative builds on the September 2023 removal of the GST on purpose-built rental housing, with the goal of easing housing pressures in cities with high student populations.
Another key measure focuses on reducing the financialization of housing by restricting large corporate investors from acquiring single-family homes. The government is also consulting provinces and municipalities on strategies to limit such purchases. Public input will be accepted until December 19.
The goal is to ensure that prospective homeowners compete with individuals rather than large investment firms, which have been accused of driving up home prices and reducing supply for families.
More housing projects
Twelve additional underused federal properties, located in cities like Calgary, Ottawa, Laval, and Whitehorse, have been designated for housing development. This brings the total number of properties identified through the Canada Public Land Bank to 83.
The program, launched in August 2024, aims to transform unused federal land into housing, with a target of creating 250,000 new homes. These properties are now available to homebuilders, with the government emphasizing the need to accelerate affordable housing projects across the country.
Additionally, Quebec’s Housing Accelerator Fund received an additional $92 million in federal funding to meet high demand from municipalities. This builds on the $1.8 billion agreement signed in November 2023, which supports provincial efforts to speed up housing development.
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“Safe, accessible and affordable housing options are out of reach for far too many Canadians. Since the launch of the Canada Public Land Bank in August 2024, 83 properties have been identified for potential housing development, paving the way to build affordable housing across the country at a pace and scale not seen in generations,” said Jean-Yves Duclos, minister of public services and procurement.
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