The Federal Government announced that they will be making changes to the current First-Time Home Buyer Incentive program originally introduced in September of 2019. These updates are said to be coming Spring 2021.
With the current program, the parameters allow for a maximum purchase price of four times the borrower’s household income up to $120,000 on an insured mortgage. Once you factor in the mortgage insurance, this allows for a maximum purchase price of $505,000 (assuming the borrower(s) qualify).
With the updates come Spring 2021, the maximum in Vancouver (and potentially the Lower Mainland) will be increased to cap of four and half times the borrowers household income with an allowable maximum of $150,000 of the household income.
What does this mean for potential first-time buyers? In doing the calculations, this would allow a buyer to purchase to maximum of $722,000 – assuming they have the maximum allowable $150,000 of household income.
The core of the program remains the same: to help the borrower lower their monthly mortgage payment by receiving assistance with the down payment via a government incentive. This incentive is shared equity in the home and would have to be paid back upon a sale.
However, this is only for owner-occupied, insured purchase (less than 20% down).
As more updates and details are shared, we will keep you posted.
In the meantime, please reach out to us if you have any questions.