Easier Than Ever to Buy Your First Home

Are you teetering on whether you can afford to buy a house or not?

Well there’s good news on the horizon. The Canada Mortgage and Housing Corporation, a division of the government responsible for helping people enter the housing market, is kicking in and making it easier for first time buyers to make the leap.

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The Important Take-Aways

  • Under the Home Buyers Plan, you are now able to borrow up to $35,000 from your RRSP to help with a down payment and you can repay it over 15 years.
  • Under the First-Time Home Buyer Incentive, you will receive up to ten per cent of the purchase price reduced from your mortgage amount.
  • Example: $200,000.00 new construction – $10,000 5% down payment equals a $190,000.00 mortgage without incentives or $170,000.00 mortgage after incentives are applied. (The repayment terms are still uncertain)
  • This new incentive helps homebuyers in two ways:
    1. You still have to qualify under the stress test ensuring you don’t go in “over your head”, but it’ll be easier to qualify.
    2. Your monthly mortgage payment will be less for the term of the mortgage (i.e. repayment on $170,000.00 instead of $190,000.00) which equates to a difference of approximately $100/month.
  • Only homes with under $120,000.00 annual income will be eligible to participate in the incentive program.
  • The government is hoping to have the new program up and running by September 2019.


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Under the new CMHC First-Time Home Buyer Incentive, $1.25 billion will be used over the next three years to help lower mortgage costs for eligible Canadians. Borrowers will still have to pony up a down payment of at least five per cent of the home purchase price, but under the new incentive they will also receive up to ten per cent of the house price from CMHC, therefore lowering the amount of their mortgage. A smaller mortgage equals smaller monthly payments, which helps offset costs of home ownership.

Mortgage applicants will still have to qualify under the federal stress test, which ensures that borrowers will be able to keep up with their debt repayments even at higher interest rates. However, the incentive would essentially lower the bar for test takers, as applicants will have to qualify for a lower mortgage.

Additionally, under the Home Buyers Plan (HBP) you can withdraw from your RRSP to use it for a down payment on a home. Under the new 2019 budget, the amount you can borrow has now increased from $25,000 to $35,000. This amount still needs to be repaid over 15 years, but it is essentially an interest free loan from yourself (or your retirement).

For more information, visit CMHC’s website at https://www.cmhc-schl.gc.ca/en




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