New first time home buyers program 2019
Are you a first time home buyer? Good news the federal government in its new budget has made it a little easier to finance your first home. Watch this video as I go over the new changes.
As mentioned earlier the federal government made a two big changes to the first time homebuyer program.
- Revised RRSP borrowing Limit - as of March 2019 the RRSP Borrowing limit has increased from $25k for each individual to $35k. If you have a partner who is also a firs time home buyer, purchasing with you. Together you could borrow a total of $70k from your RRSP
- Shared equity loan 5% for existing homes and 10% brand new homes. The shared equity loan is financed thru CMHC , it’s interest free and payment free for the first 5 years. You will need to pay back this loan when you eventually sell the home. But to qualify for the loan you need to have an annual income of less than 120k and the purchase price of the home can not exceed 4 times your annual salary. If your income was 120k, your maximum purchase price would be $480,000. Applications for this program may start this September.
One issue I have with this equity program is the $480,000 limit, you can’t buy a whole lot under $500,000 at least in the city of Vancouver.
But you can definitely use this homeowners program on outlying areas maybe in the suburbs where where you can get a condo.
A search of the Real Estate Board of Greater Vancouver's listings website, realtylink.org recently showed 135 listings — including houses, condos and townhomes — in Vancouver for less than $500,000, 115 in Burnaby, 24 in Port Moody. In Abbotsford there were 346 properties listed for less than $500,000.
In my own opinion if the government really wanted to stimulate first time home buyers they could have increased their amortizations from 25 years to 35 years or get rid of the 2 percent stress test for the first time buyers.
So there you have it, the 2 new changes to the first time home owners program. If you have any questions about this topic please feel free to reach out to me. If you are interested in buying a home in vancouver please watch my playlist over here.
Question of the day, would you apply for the shared equity loan as a first time buyer? Please leave it in the comments below. I will try my best to personally answer all comments myself.