Update: Federal budget helps first-time home buyers
In their fourth and final budget before the October 2019 federal election, released Tuesday March 19th, the Liberal government introduced a new First-Time Home Buyer Incentive, to take effect September 2019. The incentive is designed to lower mortgage costs for eligible Canadians.
The new $1.25-billion incentive program would allow prospective buyers to apply for an interest-free loan from Canada Mortgage and Housing Corporation (CMHC). CMHC would offer 5% towards an existing home or 10% towards a new build. The additional funds could lower the cost of a mortgage.
Some of the requirements of the First-Time Home Buyer Incentive include:
- Household income must be under $120,000.
- Purchasers must provide a minimum 5% down payment.
- Amount received cannot exceed 4 times the participants’ annual income (or $480,000).
- The loan is required to be repaid.
In addition, the government is increasing the amount first-time home buyers can withdraw from their RRSPs in order to finance their purchase (the Home Buyers’ Plan) from $25,000 to $35,000 per individual.
The regulations regarding the mortgage stress test would not be changed.
If you are in Ontario (and are a member of the education community) and would like more information on how the new First-Time Home Buyer Incentive could benefit you, please call an Educators Financial Group lending specialist at 1.800.263.9541 or get started online.
Be sure to also checkout our ‘Home-Buying 101’ series including:
The 4 essential pieces of pre-mortgage homework
How to choose the right mortgage lender
Uncovering the hidden costs of buying
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The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering of tax, legal, accounting or professional advice. Please ensure to consult your accountant and/or legal advisor for specific advice related to your circumstances. Educators Financial Group will not be held responsible or liable for any losses, costs, damages or expenses incurred by reason of reliance as a result of the aforementioned information. The information presented was obtained from sources that are believed to be reliable. However, Educators Financial Group cannot guarantee their completeness or accuracy.