Our Blog

The federal government has discontinued the First-Time Home Buyer Incentive, a much-criticized program aimed at improving housing affordability for new buyers that saw muted uptake in major markets.

Canada Mortgage and Housing Corporation (CMHC), the national housing agency, said in a statement on its website that the program was winding up, with no new or updated submissions to be accepted after midnight ET on March 21.

Applications resubmitted after that date will be subject to a manual review, with review requests to be submitted no later than midnight ET on March 25 and no new approvals to be granted after March 31.

Introduced in 2019, the Incentive was aimed at reducing monthly mortgage payments for qualified first-time buyers through a shared-equity scheme. It offered a contribution of 5% or 10% towards the purchase of a newly constructed home, and 5% of the purchase of a resale existing home or new/resale mobile or manufactured home.

Still, that shared-equity component, which meant the government would also benefit from the potential future sale of a home, proved unpopular with buyers, who would have to repay the Incentive either after 25 years or upon sale.

The program faced challenges from the off. In 2020, federal Conservative MPs Tom Kmiec and Stphanie Kusie slammed its cost and low levels of consumer interest, urging CMHC to topdeo the scheme,  after an annual report showed its uptake lagged far below projections.

Mortgage Professionals Canada (MPC) also criticized the Incentive at its 2022 summit, when vice chair Veronica Love said the scheme was “simply failing” with data showing participation in the program was less than a third of what the government had originally envisaged.

Between its launch in September 2019 and the end of March 2021, the program had seen  LESS THAN 10,000 sucessfull applicants across Canada with Edmonton and Calgary accounting for nearly 2,000 of that total.

XX

First-Time Home Buyer Budgeting: What You Need to Know
 April 20 2023     Posted by John C Filice


As a first-time home buyer, budgeting is an essential part of the home buying process. By carefully planning your finances and considering all of the costs associated with purchasing a home, you can ensure that you are prepared to make a smart, informed decision.

First-Time Home Buyer Budgeting: What You Need to Know

One of the first things you need to consider when budgeting for a home is your down payment. This is the upfront payment that you will make towards the purchase of your home, and it typically ranges from 5% to 20% of the home's purchase price. In addition to your down payment, you will also need to budget for closing costs, which can include fees for things like legal services, inspections, and lender charges.

Another important factor to consider when budgeting for a home is your monthly mortgage payment. This will include both the principal (the amount you borrowed) and the interest (the cost of borrowing the money), as well as any property taxes and insurance. To get a rough estimate of your monthly mortgage payment, you can use an online mortgage calculator to input your loan amount, interest rate, and loan term.

In addition to your mortgage payment, you will also need to budget for other ongoing expenses associated with owning a home. These can include things like utilities, maintenance and repairs, and homeowners association fees (if applicable). It's important to carefully consider these costs and factor them into your budget to ensure that you can afford the monthly expenses of homeownership.

Finally, it's important to remember that your budget is a guideline, not a hard and fast rule. You may need to adjust your budget as you go through the home buying process, and it's important to be flexible and prepared for unexpected expenses. By carefully planning and budgeting for your first home, you can set yourself up for success and make the home buying process a smoother and more enjoyable experience.


Bookmark and Share