Curious About the Home Buyer’s Incentive?
By Kathy Schmidt, Broker/Owner, Schmidt Realty Group Inc.
This program came into effect awhile back now, but people still approach me regularly with a lot of questions about it. With the spring market an extra busy time for first-time buyers I thought it would be good to provide some quick facts and resources about this program.
- Do you qualify?
- Yes, if you’ve never owned a home before
- Yes, if it will be your primary residence
- Yes, if your combined household income is no more than $120,000
- Yes, if you’ve recently divorced or experienced a common-law breakdown
- And… if you’re buying with your partner, only one of you has to qualify!
- How large can your mortgage be?
- You must be borrowing at least 80% of the value of the home
- You can borrow up to 4 times your qualifying income
- So… this means the highest price you could pay would be $480,000 (4 x $120,000)
- How much will the government give me?
- Up to 5% of the price of an existing(resale) home
- Up to 10% of the price of a brand-new home
- How does this all work?
- Because you’re borrowing 5% or 10% less, your monthly payments will be lower. Yay!
- You don’t have to pay back the amount the government gives you until…
- You’ve been in the house 25 years
- You sell the house
- Or, you refinance the property
- But… you can repay it at any time
- When you do repay it, the government will be repaid their share (ie 5% or 10%) based on the current value of the house at that time.
- If the value of the house goes up, the government shares in the profits
- If the value of the house goes down, the government shares in the loss
- You’ll be responsible to arrange for an appraisal and submit documents to the government to confirm the amount of repayment
Remember, you still need your own down payment, even though the government is contributing 5%-10%. You’re buying the property with the government…they’re putting up their share and you have to put up your share. This can be a really great program in many cases, but to know for sure if it’s best for you, speak with a mortgage professional. I can recommend some amazing Edmonton experts so please let me know if I can be of any help!
To learn more about this program visit CMHC online: https://www.cmhc-schl.gc.ca/en/nhs/first-time-home-buyer-incentive