If you’re looking to buy your first home, you’ll appreciate the new equity-sharing homebuyer’s incentive announced recently by the federal government. Administered through CMHC (Canada Mortgage and Housing Corporation), the First-Time Home Buyer Incentive provides funding of 5% or 10% of your home purchase price.
No ongoing monthly payments toward the incentive are required, which helps you manage your cash flow. Instead, you repay the incentive at resale. For example, if you purchased a $400,000 home with a 5% down payment and a 5% CMHC shared equity mortgage ($20,000), the size of the borrower’s insured mortgage would be reduced from $380,000 to $360,000. This reduction would help lower your monthly mortgage payment.
Also, the tax-free amount that first-time homebuyers may withdraw from their RRSPs towards the purchase of their first home has increased from $25,000 to $35,000 (for withdrawals made after March 19th, 2019).
For more information, contact your neighbourhood branch to set up a meeting with a Casera mortgage specialist.