First Time Home Buyer Incentive Launching on September 2, 2019
Federal Government’s Effort to Help Canadians Buy their First Home
The First Time Home Buyer Incentive will help middle class families fulfill their dream of homeownership by reducing monthly mortgage payments required for first time homebuyers, without increasing the down payment amount. This program is in addition to other measures in 2019 Budget to support first time homebuyers such as increased RRSP withdrawal limit from $25,000 to $35,000. The Government of Canada has allocated $1.25 billion over three years for this program starting September 2019.
Quick Summary of the First Time Homebuyer Incentive
The Incentive will allow eligible first time homebuyers who have the minimum down payment for an insured mortgage with Canada Guaranty, CMHC or Genworth to apply to finance a portion of their home purchase through a form of shared equity mortgage with the Government of Canada.
For the purchase of an existing home, an Incentive amount of 5% may be available. For the purchase of a newly constructed home, an Incentive amount of 5% or 10% may be available.
For a new or resale mobile/manufactured home, an Incentive amount of 5% may be available.
Doubling the Incentive for purchasers of newly constructed homes encourages new housing supply.
No on-going repayments are required, the Incentive is not interest bearing, and the borrower can repay the Incentive at any time without a pre-payment penalty.
The government shares in the upside and downside of the change in the property value.
The buyer must repay the Incentive after 25 years, or if the property is sold, whichever is earlier.
The Incentive will be available to first-time homebuyers with qualified annual household incomes up to $120,000. At the same time, a participant’s insured mortgage and the incentive amount cannot be greater than four times the participant’s qualified annual household income.
Per the table below, for a family buying a $500,000 home, this program could save them as much as $286 per month or more than $3,430 a year (note: for illustration purposes only, results subject to change depending upon amortization, interest rate, term, etc.).
Team Kalia has helped numerous first time home buyers, millennials, newcomers and people on work permit buy their first home or condo in Mississauga and surrounding areas. Call us today at 905-339-5111 to book your personalized one-on-one First Time Home Buyer Consultation!
Contact Team Kalia to Buy Your First Home or Condo in Mississauga
Amit is a full time local REALTOR® with RE/MAX Real Estate Brokerage Inc. in Mississauga. RE/MAX is Canada's #1 real estate company. Team Kalia serves property sellers, first time buyers, investors, landlords, new immigrants and non-residents in Mississauga including Square One City Centre area. Team Kalia offers a 30 Days Sold Guarantee to Sellers. They also provide tenant finding services to their investor clients.