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What to know about the new CMHC mortgage incentive

Federal budget 2019: What to know about the new CMHC mortgage incentive

- article from Global News


Arguably the most talked-about measure of the Liberals’ latest federal budget is the First-Time Home Buyer Incentive.

Under the plan, the government would help some first-time buyers by advancing up to 10 per cent of the purchase price of a home so they can take out a smaller mortgage and keep monthly payments lower.

The program would be administered by Canada Mortgage and Housing Corp. (CMHC), the crown corporation that insures most Canadian mortgages on homes purchased with a down payment of less than 20 per cent of the price. Indeed, the new incentive would only be available for CMHC-insured mortgages.


There are number of other caveats. Buyers must pony up their own cash for a down payment — at least five per cent of the home price. And they must have a household income below $120,000 a year. Also, the amount of the insured mortgage plus the CMHC incentive would be capped at four times the home buyers’ annual incomes, or up to $480,000.

That means the most expensive home you can hope to buy under the plan would be worth somewhere between $500,000 and $600,000, depending on the size of your down payment.


The CMHC would give out up to $1.25 billion in incentives over three years starting in September. Buyers of newly-constructed homes would get 10 per cent of the home price, while those purchasing an existing property would get five per cent.


That’s what we know about the program for now. But there are a number of missing details and bigger questions surrounding the proposal:
How exactly will you need to repay the money? How exactly will your income be assessed? How would the new policy impact home prices? These topics and more are discussed on the Global News article here:  https://globalnews.ca/news/5075888/federal-budget-2019-cmhc-shared-equity-mortgage/

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