Shared Equity Mortgages & 2019’s Budget Announcement

As part of the 2019 Budget handed down yesterday, changes for prospective homeowners include:

  1. RRSP withdrawal limits for the First-Time Home Buyers Program have changed from 25K – 35K.
  2. A rate reduction for Student Loans, which translates to carrying lower debt against a mortgage.
  3. CRA will allow divorced individuals to qualify as First-Time Home Buyers again.
  4. A Shared Equity Mortgage Incentive from CMHC:

The incentive is designed to reduce a purchasers monthly mortgage payment and help them achieve home ownership. For qualified first-time home buyers, CMHC will share 5% equity for an existing home and 10% for new home to reduce the monthly mortgage payment.

  • 5% for existing homes
  • 10% for new homes
  • interest free loan
  • coming in fall 2019

Key notes:

  • Does not affect mortgage qualification/stress test.
  • Cannot be used as the down payment.
  • Must be paid back over time or when the home is sold.

It is not exactly what the industry was hoping for but is a program being made available in the fall and I would stress the importance of seeing a professional mortgage broker who is fluent with this new program and others through CMHC, the programs through NL Housing, and how each Bank’s policies and procedures vary according to the program used.

Ian Clark

Ian Clark is a graduate of The College of The North Atlantic and has been working with East Coast Mortgage Brokers since 2017. Prior to ECMB, Ian was brokering with Mortgage Alliance. He also sits on the board MPPCC Board, CPC and CMBA.

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