Skip to main content

“I am a Canadian, free to speak without fear, free to worship in my own way, free to stand for what I think right, free to oppose what I believe wrong, or free to choose those who shall govern my country. This heritage of freedom I pledge to uphold for myself and all mankind.” ~~ John G. Diefenbaker

CANADIAN MORTGAGE TREND -- Long-awaited tweaks to the government’s First-Time Home Buyer Incentive, including for Vancouver, came into effect yesterday

 


First published in Canadian Mortgage Trends

 

Nearly five months after the changes were first proposed, the Department of Finance and Canada Mortgage and Housing Corporation (CMHC) have enhanced the eligibility criteria for buyers in Toronto, Vancouver and Victoria.

 

As a recap, the FTHBI is a shared-equity program whereby the government contributes between 5% and 10% of a first-time buyer’s down payment, and shares in any increase or decrease in the home value until the loan is repaid. The buyer doesn’t need to make any monthly payments, though the loan must be repaid after 25 years or when the home is sold.

 

The new eligibility requirements include:

  • the maximum eligible household income has been raised to $150,000 (an increase from $120,000)
  • participants can borrow up to 4.5 times their household income, up from the current four times.

 

The changes are limited to those living in the three cities noted above, while the original criteria continue to apply to those living in the rest of the country.

 

“Our government recognizes that making the choice to own for the first time is a challenge, especially in major markets where housing costs are rising fastest,” said Adam Vaughan, Parliamentary Secretary to the Minister of Families, Children and Social Development and the Minister responsible for the CMHC. “To that end, the new enhancements under the Incentive increases the eligibility of the program in Toronto, Vancouver and Victoria.”

 

What do the FTHBI changes mean?

 

The increase in the maximum household income and borrowing limit means first-time buyers wanting to participate in the program can now theoretically qualify for a purchase price up to $722,000, up from roughly $505,000 for those under the original requirements.

 

This comes at a time when the average house price has soared to $716,000, according to March data from the Canadian Real Estate Association. Even without the high-priced markets of the Greater Toronto and Vancouver areas, the national average price still stands at $556,828.

 

The question, of course, is whether the changes will actually assist first-time buyers struggling with affordability as prices continue to rise nationwide.

 

“No. The program isn’t really assistive to first-time buyers,” says Paul Taylor, President and CEO of Mortgage Professionals Canada. “Even with the increased 4.5 times income, all eligible participants would actually be able to borrow more using a traditional 5% down insured mortgage. As such, it won’t really create any new market entrants. It will provide an option for those who already qualify, in very specific parameters, to reduce their monthly payments at the trade-off of home equity.”

 

Taylor told CMT that the program is true to its name, being an “incentive” program as opposed to being “assistive.”

 

“The government is incentivizing first-time buyers to take on less debt and to reduce their monthly payments, but the tradeoff is reduced purchasing capacity and government co-ownership,” he added, saying the number of borrowers eligible to actually qualify for the new maximum purchase price of $722,000 “will be very small.”

 

 

Steve Huebl ... is a graduate of Ryerson University's School of Journalism and has been with Canadian Mortgage Trends and reporting on the mortgage industry since 2009. His past work experience includes The Toronto Star, The Calgary Herald, the Sarnia Observer and Canadian Economic Press. Born and raised in Toronto, he now calls Montreal home.

 

Copyright © 2019 Canadian Mortgage Trends

Terms and Conditions of Website Use

Comments

Post a Comment

Popular posts from this blog

Okanagan Farmers Face NDP-Created Water Crisis ~~ BC Conservatives

Okanagan farmers are facing a water crisis as government-imposed restrictions threaten to kill their crops and destroy one of B.C.’s most important agricultural industries. In perhaps the most water-rich province in the country, our farmers have been left high and dry by the NDP government. For nine weeks, Okanagan and Shuswap farmers have proposed solutions, only to be met with NDP foot-dragging. Now forest fires have come to these regions as they are simultaneously reckoning with a water crisis that has been made worse through years of government inaction. Vernon-area farms have lost 70 percent of their water, while Kelowna and Summerland growers face severe restrictions. This situation is unacceptable and cannot continue. Ian Paton, Shadow Minister for Agriculture, said the NDP is once again forcing farmers to pay for its own failure to plan. "Farmers and ranchers must be listened to when decisions affecting their livelihoods are made, and under the NDP, they aren’t," said...
Post a Comment
Read more

BC Conservatives Point to Warning Signs in BC’s Economy

While Canada posted modest job gains in July, warning lights are still flashing in British Columbia. Youth unemployment remains stubbornly high, leaving too many first-time jobseekers shut out of the workforce. BC also lost 3,400 public administration jobs in July, likely as temporary Census positions ended. “BC's jobs divide remains stark. Unemployment is far higher in business-driven communities like Kelowna (9.3%) and Abbotsford-Mission (8.3%) than in Victoria (5.0%). Government should be focused on creating the conditions for private-sector investment and job growth,” said Gavin Dew, MLA for Kelowna-Mission and Shadow Minister for Economic Development. “We need an economy where young people can find work, businesses can hire, and every region has the opportunity to prosper.” This comes as BC faces five straight quarters where more businesses are closing than opening, an NDP cabinet rift over job-creating projects like Tilbury LNG, and fresh signs that even the province's to...
Post a Comment
Read more

FORSETH: That, to me, sure seems to fit with narcissistic personality disorder – AND - a definite sense of self entitlement

I think most people are aware of why England’s Henry the 8th created the Church of England. It was out of a belief that he should be able to do anything he wanted. And what did he want?  It was a male heir that would follow him and, at his death, become the next King of England.   His marriage to Catherine had not produced one, so he demanded the Pope to allow him to divorce her.  The Pope of course refused so Henry created his own church, and declared himself the "Supreme Head of the Church of England", thereby allowing him to annul the marriage. In other words, he wanted his own way, and because he had the ultimate power in England, he forced his will over the church. Many (most?) would say people suffer like that from 'narcissistic personality disorder'. The Mayo Clinic says, “ People with this disorder may lack the ability to understand or care about the feelings of others. But behind this mask of extreme confidence, they are not sure of their self-worth and are e...
5 comments
Read more

Labels

Show more