Launched on September 2nd 2019, the first time home buyer’s incentive (FTHB) is designed to help qualified first time home buyers reduce their monthly expenses. The goal is to make housing more affordable. The government of Canada has set aside $241M for the program. In addition, it has estimated it will help 100,000 Canadians over the next 3 years. Here, we talk about the new FTHB incentive.
Your mortgage must be default insured, CMHC will provide 5% of the downpayment for an existing home, or 10% downpayment for a new build construction.
Your income must be less than $120,000 per year and you must meet the criteria of being a first time home buyer. The insured mortgage plus incentive cannot be more than four times your household income.
There are no repayments required while you have your mortgage. However, you can pay it back anytime or upon the sale of your property. This means that the government is sharing in the risk (and reward) of buying your first home.
According to a recent survey completed titled “Home Buying is Hard Work” by Mortgage Professionals Canada, Canadians have mixed feelings about the FTHB Incentive. The results were that Canadians are in “moderate agreement” that the new First-Time Home Buyer Incentive will “make it easier for Canadians to afford a home.”
However, sentiment is different among existing homeowners. Most say they would not have used the program when they bought their first home. In addition, most respondents also said they are not willing to give up equity in their home.
Mortgage Professionals Canada Chief Economist Will Dunning expects the program will result in less than 5,000 incremental first-time purchases per year.
The More You Know
If you’re looking to buy your first home, It’s important to understand your options. If you are considering the first time home buyer’s incentive program, you should do your research.
Unfortunately, understanding mortgages can be difficult. There is a lot of information to consider when simply qualifying for a mortgage. This is without adding the stress of government programs, and what these programs mean for you, long term.
You are not alone!
The good news is that you don’t have to navigate everything alone.
As an independent mortgage professional, my job is to help you qualify for the best mortgage available. Including using the best programs and incentives available. I’d love to walk you through all your options and explain in detail the ramifications of using the FTHB incentive. It might be a fit for you, however, everyone’s situation is different. Let’s talk!
If you’re thinking about buying your first home, give me a call at (705) 333-4338 or get in touch with me here!