Introducing Canada's new incentive program for future homeowners!
The Canadian government has just released an incentive program stating that the Canada Mortgage and Housing Corporation (CMHC) will have access up to $1.25 billion over 3 years to assist Home buyers with their mortgages.
How does this work? Let me explain!
First-time Home buyers can utilize a 10% incentive towards a newly built house OR 5% on a resale.
Households with an annual income under $120,000 and applicants able to come up with 5% down payment will be able to participate in the incentive program.
You might be saying to yourself, “This sounds too good to be true.” So, what’s the catch?
Eventually the homeowner will have to pay back the CMHC's contribution to the property. However, you are not expected to pay until you sell the property.
Let’s see what the numbers look like.
Allowance with the Home Buyer’s Plan from $25K to $35K.
The Home Buyer’s Plan (HBP), which currently allows first-time buyers to take up to $25,000 out of their Registered Retirement Savings Plan (RRSP) to finance their Home with no penalty will be increasing their borrowing level to $35,000!
The federal government has also decided to give Canadians who have separated from a marriage or a common-law relationship the opportunity to participate in the HBP despite not meeting the original requirements of being a first-time buyer.
So what do you think about the new incentive program? If you have any questions about the CMHC program, feel free to contact us! We're happy to help out future homeowners!