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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.

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Top Reasons To Refinance Your Home And Reasons Why You Maybe Should Not.
 August 23 2023     Posted by John C Filice


Refinancing a mortgage means replacing your existing loan with a new one, either with your current lender or a different one. Canadians often consider refinancing for various reasons, such as consolidating debts, financing home improvements, or securing a lower interest rate. However, refinancing carries certain risks and can lead to substantial prepayment penalties. Understanding when refinancing is beneficial and when it may be unwise is crucial.

Reasons to Consider Refinancing Your Home Mortgage

Refinancing offers several advantages, depending on your financial situation and goals. Here are some common reasons why Canadians might choose to refinance:

  • Debt Consolidation: By merging debts from various sources into one mortgage, refinancing can help reduce high-interest rate obligations like car loans or credit cards. This approach replaces your original home loan with one that covers all your other debts, potentially saving you money on interest payments. Careful consideration of the new loan terms is essential to ensure it's a sound financial move.
  • Financing Home Improvements: Refinancing can provide extra funds for home renovations that may increase your property's value and offer a good return on investment (ROI). If you're considering this option, plan a realistic budget and research which improvements are likely to yield a solid ROI.
  • Lowering Your Interest Rate: Even a small reduction in your interest rate can lead to significant savings over time, allowing you to build home equity more quickly.
  • Paying Off Your Loan Faster: Refinancing might enable you to secure a lower interest rate and extend your mortgage term through what lenders refer to as the "blend-and-extend option." This can either reduce your monthly payments or, if you maintain your current payment amount, allow you to pay off your mortgage more quickly.

Situations Where Refinancing May Not Be the Best Option

Refinancing should be a carefully considered decision, and there are scenarios where it might not make financial sense:

  • Luxury Purchases: Refinancing to fund extravagant purchases is generally unwise, as the long-term benefits of refinancing won't address immediate cash needs. A home equity line of credit (HELOC) might be a more suitable alternative.
  • Recent Home Purchase: If you haven't built up enough equity in your home, refinancing could lead to higher interest rates and diminished savings.
  • Financial Difficulties: If you're facing financial challenges, refinancing might not be the best solution. Breaking your current mortgage could result in hefty fees that may not be offset by long-term savings. Other lending options might be more appropriate.

Refinancing a mortgage can be an excellent solution for some, but it's not suitable for everyone. Thorough research, asking the right questions, and understanding your personal situation are vital to making an informed decision. If you need more information about mortgage refinancing and the options available to you, don't hesitate to reach out for assistance.


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