by Steve Randall | 18 Jun 2019 | from repmag.ca
A new federal program designed to help middle class families get on the housing ladder is being introduced while the previously announced Shared Equity Mortgage Provider Fund will launch next month.
The federal government has announced that the First-Time Home Buyer Incentive will reduce monthly mortgage payments for first-time buyers without increasing their down payment.
The incentive will allow eligible first-time homebuyers who have the minimum down payment for an insured mortgage with CMHC, Genworth or Canada Guaranty, to apply to finance a portion of their home purchase through a form of shared equity mortgage with the Government of Canada.
For existing homes, the incentive will be 5% while for new homes there will be a 5% or 10% option. The larger share available for new homes aims to boost housing supply.
The program will launch on September 2, 2019, with the first closing on November 1, 2019.
"The First Time Home-Buyer Incentive is designed to benefit those who need more assistance with housing costs, middle class Canadians. Thanks to mortgage payments that are more affordable, many families will have hundreds of dollars more each month in their pockets – money to spend on things like healthy food, sports activities for their kids, or even save for the future." said Bill Morneau, Minister of Finance.
The government has clarified that:
without FTHBI |
with FTHBI |
without FTHBI |
with FTHBI |
without FTHBI |
with FTHBI |
|
House Price |
$200,000 |
$200,000 |
$350,000 |
$350,000 |
$500,000 |
$500,000 |
Down Payment (5%) |
$10,000 |
$10,000 |
$17,500 |
$17,500 |
$25,000 |
$25,000 |
FTHBI (10%) |
NA |
$20,000 |
NA |
$35,000 |
NA |
$50,000 |
Insured Mortgage |
$190,000 |
$170,000 |
$332,500 |
$297,500 |
$475,000 |
$425,000 |
Insured Mortgage + Mortgage Insurance Premium |
$197,600 |
$174,760 |
$345,800 |
$305,830 |
$494,000 |
$436,900 |
Monthly Payment* |
$989 |
$875 |
$1,731 |
$1,531 |
$2,473 |
$2,187 |
Savings on Monthly Payment |
$114 |
$200 |
$286 |
|||
Savings on Yearly Payment |
$1,372 |
$2401 |
$3,430 |