Changes coming to First-Time Home Buyer Incentive Program
The Federal Government announced they will be making changes to the First-Time Home Buyer Incentive program that was first introduced in September 2019. The changes are said to be coming in Spring 2021.
Currently, the parameters allow for a max purchase price of 4 times the borrower's household income up to $120,000 on an insured mortgage. Once factoring the mortgage insurance, this allows for a max purchase price of $505,000 assuming the borrower(s) qualify.
Come Spring 2021, the max in Vancouver ( and possibly the Lower Mainland ) will be increased to a cap of 4.5 times household income with an allowable max of $150,000 household income.
So what does this mean? In doing the calculations, this would allow a buyer to purchase to a max of $722,000 assuming they have the max allowable $150,000 of household income.
The core of the program remains the same - it is to help the borrower lower their monthly mortgage payment by getting assistance with the down payment via the government incentive. This incentive is shared equity in the home and would have to be paid back upon a sale.
Reminder, this is for owner-occupied, insured purchases only ( less than 20% down ).