The big news this last month was the announcement made by the government which is being called the First-Time Home Buyers incentive.
From what we know so far you will now be able to increase the amount borrowed from your RRSP’s from $25,000 to $35,000 for each buyer, so a potential to use your RRSP’s to put down $70,000 for a couple.
Also, the details are a little vague but if you are to come up with 5% down on the purchase of an existing house, CMHC will match the amount and provide an additional 5% toward the purchase of a house. In doing so it will make home ownership more affordable by lowering monthly payments. On this program CMHC will match up to 10% on the purchase of a new build to stimulate new housing starts.
Here is what we know so far;
· Maximum purchase price under the program $505,000
· Maximum qualifying is 4 times combined household income
· Combined household income cannot exceed $120,000
While this program is aimed at First Time Home Buyers, it will have a positive impact on rents as it will free up some rentals. It may not work as well in some of the more expensive markets like Toronto and Vancouver, I think it will be welcome step in the right direction here.
If you would like more information about this program, please don’t hesitate to contact me.