Despite some slowdown recently in the Canadian housing market due to many factors—including regulatory changes—homeownership rates in Canada remain among some of the highest in the world. Even amongst those aged 35 and younger, 40% of households own their own homes.
The 2019 federal budget introduced a new program for first-time homebuyers in an attempt to make it easier for them to get into their first home. The CMHC’s First-Time Buyer Incentive program could see the agency contribute up to 10% of the purchase price of a home, basically, as a virtual interest-free benefit and bring down mortgage payments, which could address affordability concerns. The program is expected to be available later this year. More details are to come over the next few months, and we’ll keep you posted.
The government also increased the maximum any one individual can withdraw from their RRSP account under the Home Buyers Plan, moving from $25,000 to $35,000. This would mean that a couple today can now access up to $70,000 from their RRSPs, which could allow them to purchase a more expensive home and/or reduce their mortgage amount.
Many see these changes as a positive opportunity for new homebuyers. This could alleviate constraints on those who were adversely affected by the stress-test rule, which made it harder to qualify.
We’re always here to make sense of whatever changes happen in the mortgage market and to keep you informed of the opportunities that go along with them.