1. First-Time Home Buyer Incentive
“This measure has two goals: to make it easier for first-time buyers to access property and to encourage developers to build more homes and condominiums in Canada, ensuring that this new financing option does not create a scarcity effect that causes prices to rise,” explains Louis-François Ethier, Product Manager, Mortgage Credit Solutions at National Bank.
A couple wants to buy a new condo for $400,000. They saved $20,000 for a 5% down payment and receive a $40,000 incentive (10% of the condo’s value). Their mortgage therefore equals $340,000, to be paid in monthly installments of $1,745. Without this incentive, they would have paid $1,973, or an extra $228 per month. When they decide to repay the incentive, the couple will have to pay 10% of the condo’s market value.
Louis-François Ethier is confident that the effects on the market will be almost immediate.
“This measure was first created for cities like Toronto and Vancouver, where condos often cost around $600,000 or $700,000. This makes it difficult for first-time buyers to break into the market.” he explains. “But it’s definitely going to help first-time buyers in Montreal as well, even if prices are more affordable here.”
To learn more about the eligibility criteria and how to benefit from this incentive, consult our article on the subject.
“There are so many first-time buyers who can benefit from the HBP, which is why it’s so popular,” says Ethier.
3. The HBP is now available to people who are separated
The HBP can be used for a second time—if the RRSP withdrawal has been fully repaid—by people who are separated or divorced and decide to buy new property or buy back their ex-partner’s share.
With the new and improved HBP that can now be used by people who are separated, along with the CHMC’s interest-free loan for first-time buyers, this is the perfect time to think about buying a first home. And if you’re really serious about it, follow our guide to buying your first home.