During the Canadian election season, I promised to keep you informed of announcements by the political parties that may affect your real estate plans, hopefully in a positive way. Yesterday, I wrote about the Liberal housing plan. Today, in Part 2, I am sharing the NDP’s plan with you.
This post was first published during the 2021 federal election campaign. The proposals below are from that time.
How the political parties compared on housing
The Liberal plan went into more detail. It gave numbers and explained how the party would reach its goals. You can read my summary of the Liberal plan to help homebuyers in Part 1.
By contrast, the NDP’s statement spent more space describing the housing shortage and the affordability problem at length. It gave few details on dollar figures or on how the plan would work.
Both political parties spoke to the same concern: many families find it hard to buy a home. They differed mainly in how much detail they offered.
The 30-year amortization idea
Of all the ideas from the political parties that season, one stood out to me. This important suggestion in the NDP plan is something I have been saying for many years. Perhaps someone made the effort to pass my suggestion on to the policymakers in the NDP.
The proposal is to increase the amortization period to 30 years. That would bring relief to many people, because it would lower monthly payments. In turn, it may help more people qualify for a mortgage.
Amortization is simply the total time it takes to pay off a mortgage in full. Your term, by contrast, is the shorter period your current rate and conditions apply before renewal. For more on how mortgage rules work, the Canada Mortgage and Housing Corporation has plain guides for buyers.
The trade-off behind longer payments
While a longer amortization sounds good in the short term, keep one thing in mind. With a traditional loan, you would pay more interest in total, and it would take longer to repay the loan.
For example, spreading the same loan over more years lowers each payment. However, each extra year also adds more interest over the life of the mortgage. It is a trade-off that every buyer should weigh with care, even when political parties present it only as relief.
Who the change would affect
The change may not affect many people. Anyone paying 20% or more as a down payment already has the option of a 30-year amortization. In fact, most people tend to choose the longer period to reduce their monthly payments.
So the proposal matters most to buyers with smaller down payments, who often include first-time buyers. For a later look at how this idea developed, read my post on the government’s later mortgage reforms.
Planning your move when political parties make promises
Promises from political parties can change before they become law, and some never do. That is why it makes sense to plan around the rules that exist today, while keeping an eye on what may come next. For instance, a buyer can get pre-approved now, based on current rules, and then adjust if the rules change later. Likewise, a seller can prepare a home for market without waiting for the outcome of an election.
Whether you plan to buy, sell or do both to move to a bigger house or downsize, I am always available to talk it through. There is often a better solution a professional can offer, sometimes one you had not thought of. You may also find my steps for first-time buyers in Mississauga useful as you plan.
Talk to a Mississauga real estate agent
Do you have questions or would you like to discuss your unique needs and goals? I am here to help you find a solution that fits. Please send me a note through my contact page or call me at 416 908 5600. A. Q. Mufti, Sales Representative, RE/MAX Real Estate Centre Inc., Brokerage. If you found this helpful, I would appreciate a Google Review.
Disclaimer: this article was published on 18 January 2025 and reflects the information available at that time. Interest rates, prices, and government programs change, so check the current position before acting on anything here. It is provided for information only and is not financial, mortgage, tax or legal advice. A. Q. Mufti is a registered Sales Representative with RE/MAX Real Estate Centre Inc., Brokerage, Ontario, Canada.
