With housing prices skyrocketing over the past few years, it comes as no surprise that first-time homebuyers are having issues finding an affordable place that they can call home. However, in a new incentive, the Canadian Government is attempting to make things slightly easier for those who are looking to buy their first house. In their First-Time Home Buyer Incentive, monthly mortgage payments will be reduced for middle-class first-time homebuyers.
In a press release, the Canada Mortgage and Housing Corporation, along with the Canadian Government announced that starting on Septemeber 2, 2019, this new incentive will take place throughout the nation.
The main purpose of First-Time Home Buyer Incentive will be to reduce the monthly mortgage payments that are required for first-time homebuyers without increasing the amount that you need to save for a downpayment.
This incentive will only be available to first-time homebuyers with an annual income up to $120,000. According to the press release, if a family is buying a $500,000 home, this new incentive could save them $286 per month and more than $3,400 per year.
Of course, this price differs depending on the price of the house that is purchased.
However, there is a small catch. While this new incentive will definitely make it easier for first-time homebuyers to finally settle down in a home, it does eventually need to be paid back.
The government of Canada states that the buyer must repay the incentive that was given to them after twenty-five years, or if the property is sold. Yet, the incentive does not charge any interest.
This isn’t the only measure that the government is taking to help Canadians get settled into their first house. The Government has also increased the RRSP withdrawal limit from $25,000 to $35,000.
They have also created a Shared Equity Mortgage Provider Fund, which is a five-year, $100-million lending fund that is meant to support an ‘alternative homeownership model targeted at first-time homebuyers.’
Jean-Yves Duclos, Minister responsible for Canada Mortage and Housing Corporation states that “through the National Housing Strategy, more middle-class Canadians will find safe, accessible and affordable homes.”