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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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Bank of Canada's 2024 Outlook: A Year of Consideration
 January 15 2024     Posted by John C Filice


Bank of Canada's 2024 Outlook: A Year of Consideration

Happy New Year! I hope you had a wonderful holiday season and are ready to embark on a prosperous 2024. As we usher in the new year, I want to keep you informed about the latest developments in the Canadian mortgage market that may have an impact on your financial decisions. My first newsletter of 2024 brings significant insights into the future of the economic landscape. The Bank of Canada has started the year with careful consideration of its monetary policy.

Interest Rate Cut on the Horizon?

According to a recent article by Bloomberg, there's a possibility that the Bank of Canada may lower interest rates in the coming months. However, Governor Tiff Macklem has stressed that any rate reduction would be contingent on several months of sustained downward momentum in core inflation. This cautious approach underlines the central bank's commitment to ensuring the stability of the Canadian economy.

Shifting Focus: From How High to How Long

As we begin this new year, we witness a shift in the focus of Canadian officials. They are now more concerned about how long interest rates should remain at their current levels rather than how high they should go. This shift reflects their dedication to prudent economic management.

Comparing to the Federal Reserve

Across the border, the Federal Reserve in the United States has decided to maintain borrowing costs at their current levels. However, forecasts indicate a consensus that rate cuts may come into play in 2024. Federal Reserve Chair Jerome Powell has been vocal about policymakers' contemplation of rate adjustments as inflation gradually approaches the target goal of 2%.

What to Anticipate in 2024

As we venture into this new year, I want you to know that we will continue to keep you well-informed about any significant developments in the Canadian mortgage market and their potential impact on your financial situation.

Do not hesitate to reach out to me, your mortgage broker, should you have any questions or require assistance with mortgage or financial planning. I'm here to provide you with personalized guidance and support.


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