The government of Canada's 2019 budget tiny hand for first time home buyers

Federal Budget 2019 Extends A Tiny Hand To First-Time Home Buyers

In First Home, New Mortgage Rules by Vancouver Mortgage Broker

Canada’s 2019 budget released today extends a little hand to first time home buyers but not as much as hoped.

Rumours surfaced that we would see an ease on the stress test, increasing borrowers home purchase price … but those rumours didn’t prove true.

The new First-Time Home Buyer Incentive won’t increase a buyers purchase price but it will lower a home buyers monthly payments.

A home buyer with 5% down will receive a 10% loan from the government (for brand new homes) or a 5% loan (for existing homes) … reducing their monthly payments.

EXAMPLE:
Current First Time Home Buyer

House price $400,000
Down payment $20,000 (5%)
Incentive $0
Mortgage $380,000
Monthly payment $1,973
New First Time Home Buyer Incentive
House price $400,000
Down payment $20,000 (5%)
Incentive $40,000 (10%)
Mortgage $340,000
Monthly payment $1,745
$228 REDUCED MONTHLY PAYMENT

Details on how the government loan will be repaid have not been released and it is applicable to household incomes under $120,000 per year.

The Budget also proposes to increase the RRSP withdrawal amount for down payment to $35,000, up from $25,000.

You can read the governments full release on this incentive here:  BUDGET 2019