UNCOVERED: CMHC’s New Home Buyer Incentive
UNCOVERED: CMHC’s New Home Buyer Incentive
Matrix Mortgage Global is Canada’s #1 Fastest-Growing Mortgage Brokerage
Entering the real estate market amidst rising prices and stricter lending guidelines has become more difficult than ever. In an effort to ease the stress on hopeful borrowers, the Canadian Government has proposed the following changes to CMHC’s Insurance Plan:
Main Changes:
*RRSP Contribution increase to $35,000
*5 % ‘No interest mortgage’ for resale home purchases, 10% for new home build purchases from builders.
Restrictions:
- Maximum household income of $120,000
- Maximum mortgage amount of 4 times household income ($500,000)
- Even a max income of $119,000, max mortgage amount cannot exceed $476,000.00 which would put the max purchase price at about $525,000
Scenario:
If a borrower purchases a $400,000 home with 5% down payment + the 5% CMHC “Shared Equity Mortgage” ($20k) ., the size of the borrower’s insured mortgage would be reduced from $380,000 to $360,000, helping to lower the borrower’s monthly payment from $1939.89 to $1,821/month.
When is it paid off? The assumption is that it will be paid when a client sells or refinances, with the likelihood being that CMHC may share in a portion of the increase or decrease in value.
To see if you qualify for a purchase, you can apply online