The budget, which was released Tuesday March 19 2019, includes a first-time homebuyer incentive that will allow those who have the minimum down payment for an insured mortgage to finance a portion through a shared-equity mortgage with the Canada Mortgage and Housing Corp. Detailed information Here

The federal government expects about 100,000 first-time buyers will receive this incentive over the next three years.

There are no ongoing payments, which means that homeowners will be paying lower monthly mortgage payments. For example, if a borrower buys a new $400,000 home with a five per cent down payment ($20,000) and a 10 per cent CMHC shared equity mortgage ($40,000), the borrower’s total mortgage is reduced to $340,000 from $380,000 for a savings of $228 on his or her monthly mortgage payment.

CMHC will offer qualified first-time buyers a 10 per cent shared equity mortgage for a newly constructed home or a five per cent shared equity mortgage for an existing home.

The incentive will be available to first-time home buyers with household incomes less than $120,000. Home buyers’ insured mortgages and the incentive amount can’t be greater than four times the home buyers’ annual household incomes.

Improved RRSP Home Buyers’ Plan
The plan’s withdrawal limit will be increased to allow participants to withdraw $35,000 from their RRSPs from the current $25,000. Partners will be eligible to withdraw $70,000 from the current $50,000.

Personally, I love working with First-Time Home buyers. It is a challenging, yet rewarding experience from the initial meeting all the way to the possession date. The biggest challenge comes from getting the downpayment ready.
But what they have to realize is that their first home does not have to be perfect nor big. I always tell my millenial clients who are in the ages of 20~40 that they will have to move at least 3 more times to finally buy that perfect home. It is much easier to get closer to buying that perfect home if they start with a property because the appreciation in price is much faster than saving up.

If you are sitting on the fence to buy the first condo or not, ask yourself 2 questions: What is the worst case that will happen if you buy the property, and What will most likely happen if you buy the property. The answer is simple.