This article was first published on Oakwyn Real Estate agent Julia Beeger’s Blog.
Summary: CMHC will top up first-time homebuyers down payment interest-free – until the home is sold.
✅Buyers have to earn less than $120,000 to qualify
✅Home value has to be $500,000 or less
✅The incentive is worth up to 5% for the purchase of an existing home and up to 10% for a new build.
✅The money must be paid back after 25 years or when the property is sold, whichever occurs first
The Caveat ?: CMHC would then own a percentage of that home and would take the same percentage back when the homeowner decides to sell – on the sold price. If your home appreciated – CMHC would receive a larger sum of money than they put in.
My Take: While this program may help in some parts of Canada, the MLS® Home Price Index composite benchmark price for all residential homes in Metro Vancouver is currently $1,006,400.
That being said there are numerous attached homes under 500,000. in Metro Vancouver, where purchasers could use this break.
However, it still might not make sense as the program limits the total amount of a mortgage to 4 times the buyer’s household income, while current mortgage rules for people who are not participating in the program allow mortgages of up to 4.7 times a buyer’s household income.
Overall, if you elect to participate in the program it will keep the monthly costs down so that you have more money for everyday expenses, but you might not be able to afford as much without the program.
Want to get a hold of a Mortgage Professional but don’t know where to start? Get in touch with me, and I will forward you one of my fantastic mortgage brokers to help you figure out what you can be approved for! #unlockyourhappy #realtor
by Julia Beeger