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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.


RRSP contributions, home equity, and mortgage strategies to build wealth
 February 9 2024     Posted by John C Filice

As we find ourselves in the midst of RRSP season, it's an opportune time for homeowners like you to evaluate how your property can be a pivotal asset in boosting your financial growth. The deadline for RRSP contributions is fast approaching on March 1, making now the perfect time to consider the strategic benefits of homeownership beyond the routine of mortgage payments.

Owning a home is much more than a monthly financial commitment; it represents a strategic asset that can significantly enhance your net worth. Many homeowners face the challenge of balancing mortgage payments, monthly bills, and the important goal of retirement savings. However, with a carefully crafted strategic plan, it's possible to streamline your debts, reduce interest outlays, and simultaneously bolster your retirement savings.

A significant number of Canadians hold equity in their homes. This untapped equity can be a powerful tool in enhancing your savings and overall financial status. Let's explore two practical examples of how you can leverage your home's equity:

  1. Borrowing to invest: If you have enough equity in your home and unused RRSP contribution room, consider the option of using your home equity to invest directly into your RRSP. You can then apply any tax refund you receive toward your mortgage using your prepayment privileges. This approach can be a savvy method to augment your retirement fund while utilizing the value you've already built in your property.
  2. Debt consolidation: Another strategy involves consolidating high-interest debts, such as credit card balances or car loans, into your mortgage. This consolidation can lead to significant improvements in your monthly cash flow. Furthermore, by simplifying your monthly payments, you gain the dual benefits of financial efficiency and peace of mind.

For many homeowners, these strategies have translated into reduced monthly debt payments, less interest paid over time, and the added bonus of a growing retirement fund. As your trusted mortgage professional, I'm dedicated to helping you explore these options and determine the best path forward tailored to your individual needs.


A brief update

On January 24, the Bank of Canada held the overnight rate at 5% for the sixth consecutive month. With the softening of the Canadian economy, almost all economists who've weighed in on the forecast of the overnight rate for 2024 agree that there are most likely no rate hikes coming this year. This news increases buyer confidence and is setting the stage for a strong Spring market.

What's on the horizon for you this year?

Thinking of making a move? In the constantly evolving Canadian real estate market, staying informed and prepared is key to turning your dream home into a reality. I strongly recommend getting a mortgage pre-approval. A mortgage pre-approval is not just a preliminary step; it's a comprehensive evaluation of your financial health. This step clarifies your budget, locks in your interest rate (for up to 120 days, depending on the lender), ensures you're ready to make a confident offer on a home within your means, and marks you as a serious buyer, giving you an edge if you find yourself in a multiple offer scenario.

Is your mortgage renewal coming up? If your mortgage is renewing this year or even next year, it's never too early to start discussing options and strategies. We'll review your current situation in the context of the current interest rate environment and develop a plan that will help you stay on track.

As always, remember that I'm here to help you achieve your short- and long-term homeownership and wealth-building goals. Get in touch anytime!

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