What is the FTHBI?
Well there’s no other way to word this, so we’ll give it to you straight; the idea of it all is to lower monthly mortgage payments without increasing the down payment. You know how they say the higher the down payment, the lower the monthly payment… not necessarily. You can thank CMHC (Canadian Mortgage & Housing Corporation) for that! The initiative is to assist those that may find it impossible to buy a home due to income and many other reasons.
Let us provide you with a bit of background information on CMHC and what they do;
CMHC is the Canadian Mortgage & Housing Corporation. They provide Mortgage Default Insurance - they’re 1 of 3 Canadian Insurance providers along with Canada Guaranty & Genworth. Mortgage Insurance. Required if your down payment is less than 20% of the purchase price of your home
This insurance protects the lender in case the borrower is unable to make payments due to uncontrolled circumstances.
**If the Purchase price of the home exceeds 1MIL, CMHC Insurance is not required.
Minimum 5% for homes less than $500K
Minimum 10% for homes that are $500K to $1M
ex/ Purchase Price of $400K - DP must be $20K and up (5%)
ex/ Purchase Price of $700K - DP must be $70K and up (10%)
What rates are available?
5% or 10% Shared equity mortgage with the government of Canada
5% for resale homes
5% & 10% for new builds and resale homes
How do I know if I qualify for this program?
* Have you owned property before? NO
* Has your spouse purchased a home since you got married? NO
* Does your Annual income exceed $120K? NO
If you answered No to all 3 of these questions, then you’re a step closer to finding out your eligibility.
The buyer’s intentions have a huge impact on qualifications as well whereas the property must be occupied BY the owner, it cannot be rented out.
Do I ever have to repay this?
Yes, there are 3 options;
1. 25 years from the date of closing
2. If the home is being sold
3. It can be paid in full at any time with no penalties.
Repayment doesn’t include ongoing payments or installments of any kind, nor does it accrue interest. So you can take your time!
So to sum it all up;
1. Learn & Educate yourself on the program - Ask as many questions as you need to and ensure you know where you stand
2. Determine your eligibility
3. Choose the incentive that best suits your situation
4. Repay incentive (not right away, calm down)