Financing

First Time Home Buyers Incentive - Full Details Announced

Breaking News.jpeg

Earlier this year, the government announced a plan to help first time home buyers enter the market and help reduce their monthly mortgage carrying costs. There was no in depth information provided, and a large amount of speculation about what exactly it could include or who would be eligible.

This week, the government provided all of the details. Launching September 2nd, 2019, the first time home buyer plan is aimed at providing a 5% or 10% shared equity mortgage with the Government, which will act as part of the deposit.

More in-depth
- Total qualifying income must be no more than $120,000 and your total borrowing is limited to four times the qualifying income.
- At least one of the persons on title must be a first-time buyer (keep in mind this is also valid for those who did not own within 4 years)
- Total borrowing (including the incentive amount) is limited to four times the qualifying income.
- The incentive will be a second mortgage that is registered on the title of the property.
- There will be no regular principal payments, it is not interest bearing, and a maximum term of 25 years.
- The incentive is offered at 5% or 10% for a new construction home or condo, or only 5% for a existing re-sale home or condo.
- Property must close on or after November 1st, 2019
- Property can be a 1-4 unit residential property (hello investors), and must be available for full-time, year-round occupancy (no cottages).
- The first time buyer will be required to repay the incentive after 25 years or when the property is sold (or sooner without penalty). Refinancing will not trigger re-payment.
- Repayment is calculated at property’s fair market value at time of re-payment. If you took a 5% incentive, you would pay back 5% of the homes value at the time of repayment.

Example

Olivia wants to buy a new condo for $400,000.

Under this incentive, Olivia can apply to receive $40,000 in a shared equity mortgage (10% of the cost). This is on top of the minimum required downpayment of 5% ($20,000) that she must provide from her savings.

This lowers her monthly expenses, and the amount that she is borrowing. As a result, Olivias mortgage is now reduced by $228 less per month or $2,736 a year.

When Olivia sells her home for $420,000 she would have to pay back the incentive of 10% which is now $42,000.

Do we like it?
This is a great tool for someone who wants to lower their monthly carrying costs. It might not be a great tool for someone in a larger market with higher average prices. Every situation is different and even if you qualify, this might not be a good fit.

Do you have questions about if the new first time home buying incentive is a good fit for you? Let’s chat. Call, txt, email, or fill out the form below.

Name *
Name

Bank Of Canada - Continues To Hold Interest Rate At 1.75%

BoC-Interest-Rate-Update Ottawa Condo.jpg

Again, for the fifth straight announcement, the Bank Of Canada has left the benchmark interest rate unchanged at 1.75%. The last rate change was in October 2018, which was the fifth time since the summer of 2017 that the BoC had decided to raise the rate.

What does this mean? The BoC’s rate directly affects the rate that you will get from a retail bank for lending (mortgages and lines of credits) and savings products. When the rate is low, it means that it is cheaper to borrow money, but not as lucrative to save.

The BoC has eight fixed dates each year on which it announces whether or not it will change the policy interest rate. The announcement dates are January 9th, March 6th, April 24th, May 29, July 10, September 4th, October 30th, and December 4th.

Bank Of Canada - Holds Interest Rate At 1.75%

BoC-Interest-Rate-Update Ottawa Condo.jpg

Again, for the fourth straight announcement, the Bank Of Canada has left the benchmark interest rate unchanged at 1.75%. The last rate change was in October 2018, which was the fifth time since the summer of 2017 that the BoC had decided to raise the rate. This was the first announcement that did not include any mention of a need for future increases, which signals that the BOC is in no hurry to move the rate (unlike past announcements where it was mentioned). The BOC is projecting growth of only 0.3% in the first quarter of 2019, with a slightly more positive projection on the second quarter.

What does this mean? The BoC’s rate directly affects the rate that you will get from a retail bank for lending (mortgages and lines of credits) and savings products. When the rate is low, it means that it is cheaper to borrow money, but not as lucrative to save.

The BoC has eight fixed dates each year on which it announces whether or not it will change the policy interest rate. The announcement dates are January 9th, March 6th, April 24th, May 29, July 10, September 4th, October 30th, and December 4th.

Breaking News - Federal Budget + First Time Buyers

Breaking News Ottawa Condos.jpeg

The Federal Government has announced the budget which includes a number of incentives targeted at housing affordability and helping first time buyers.

The budget includes two main changes, with a number of details still unclear.

The first incentive is the amount that an eligible first time buyer would be able to withdraw from their registered retirement savings plan (RRSP). The Home Buyers’ Plan will allow $35,000 (was previously $25,000) to be withdrew from the RRSP without having to pay tax on the withdrawal.

The second incentive is the introduction if the First-Time Home Buyer Incentive which would allow eligible buyers to finance part of their downpayment through a shared-equity mortgage with CMHC. This would be for eligible first time buyers that are making a downpayment of less than 20 per cent. CMHC would offer 10 per cent shared equity mortgage for new construction homes and condos, or 5 per cent for existing (re-sale) homes and condos. It is expected to start in September and last for three years minimum.

There are lot of details that are still unclear (shared equity? what about losses when properties sell? first time buyers - its not that simple! how much will they make when a buyer sells? etc.).

Any questions on how it could affect you or an upcoming purchase? Fill out the form on the bottom of the page and let’s chat.

Bank of Canada - Interest Rate Holds at 1.75%

BoC-Interest-Rate-Update.jpg

Once again, the Bank of Canada has released that it will keep its benchmark interest rate unchanged at 1.75%. The last rate change was in October 2018, which was the fifth time since the summer of 2017 that the BoC has decided to raise the rate. In the fall, there was a high guarantee that the rate would rise numerous times in 2019, however, with the economic slowdown that began in the fall (compounded by the slowdown in Canada’s oil sector), has led many to believe rates will hold or drop throughout the year.

What does this mean? The BoC’s rate directly affects the rate that you will get from a retail bank for lending (mortgages and lines of credits) and savings products. When the rate is low, it means that it is cheaper to borrow money, but not as lucrative to save.

The BoC has eight fixed dates each year on which it announces whether or not it will change the policy interest rate. The announcement dates are January 9th, followed by March 6th, April 24th, May 29, July 10, September 4th, October 30th, and December 4th.

Bank of Canada - Interest Rate Holds at 1.75% again

BoC-Interest-Rate-Update.jpg

Once again, the Bank of Canada has just released today that it will keep its benchmark interest rate unchanged at 1.75%. The last rate change was in October 2018, which was the fifth time since the summer of 2017 that the BoC has decided to raise the rate.

What does this mean? The BoC’s rate directly affects the rate that you will get from a retail bank for lending (mortgages and lines of credits) and savings products. When the rate is low, it means that it is cheaper to borrow money, but not as lucrative to save.

The BoC has eight fixed dates each year on which it announces whether or not it will change the policy interest rate. The next announcement will be on January 9th (followed by March 6th, April 24th, May 29, July 10, September 4th, October 30th, and December 4th).

Bank Of Canada - Interest Rate Holds at 1.75%

BoC-Interest-Rate-Update.jpg

The Bank of Canada has revealed that it will keep its benchmark interest rate unchanged at 1.75%. This comes from the previous raise in October, which was the fifth time since the summer of 2017 that the BoC has decided to raise the rate.

What does this mean? The BoC’s rate directly affects the rate that you will get from a retail bank for lending (mortgages and lines of credits) and savings products. When the rate is low, it means that it is cheaper to borrow money, but not as lucrative to save.

The BoC has eight fixed dates each year on which it announces whether or not it will change the policy interest rate. The next announcement will be on January 9th (followed by March 6th, April 24th, May 29, July 10, September 4th, October 30th, and December 4th).