First Time Home Savings Account
This program aims to enhance affordability for first-time homebuyers. It assists eligible individuals in reducing their monthly mortgage payments without increasing their financial strain.
The First-Time Home Buyer Incentive is a shared-equity mortgage program in partnership with the Government of Canada. Here's what it offers:
- 5% or 10% support for first-time buyers purchasing newly constructed homes.
- 5% support for first-time buyers purchasing existing (resale) homes.
- 5% support for first-time buyers purchasing new or resale mobile/manufactured homes.
With the shared-equity component, the government participates in both the potential gains and losses of the property's value, capped at a maximum gain or loss of 8% per annum (non-compounded) on the Incentive amount from the advance date to the repayment date.
By utilizing this Incentive, borrowers may require a smaller down payment, making mortgage payments more manageable. This results in a reduced mortgage amount and, consequently, lower monthly expenses.
Repayment of the Incentive is based on the home's market value at the time of repayment, equal to the percentage (e.g., 5% or 10%) of the initial home value used to determine the Incentive. The maximum repayment amount is determined as follows:
(i) If the home's value has appreciated, the Incentive plus a maximum gain of 8% per annum (non-compounded) on the Incentive amount from the advance date to the repayment date. (ii) If the home's value has depreciated, the Incentive minus a maximum loss of 8% per annum (non-compounded) on the Incentive amount from the advance date to the repayment date.
Repayment must occur after 25 years or when the property is sold, whichever comes first. Homebuyers also have the option to repay the Incentive in full at any time without incurring a pre-payment penalty.
Source: National Housing Strategy
Embrace Green Living & Save On Your Insurance Premium
Discover CMHC's Eco Improvement:
Get a 25% partial premium refund if you have CMHC insurance and are making energy-efficient upgrades to your newly purchased home. This program supports environmentally-friendly renovations, aligning with CMHC's commitment to combat climate change and Canada's goal of carbon neutrality by 2050. Join the movement towards greener living and enjoy savings on your insurance premium!
Starting September 7, 2023, Eco Improvement allows you to apply for a 25% partial premium refund on your CMHC insurance – a win for you and the environment!
Qualifying for the Partial Premium Refund: To be eligible for Eco Improvement, you must:
- Be a homeowner with CMHC-insured financing.
- Invest a minimum of $20,000 in energy-efficient improvements falling into these categories:
- Building envelope (e.g., insulation, windows, doors, roof, attic, air tightness, and foundation).
- Mechanical systems (e.g., HVAC - Heating, Ventilation and Air Conditioning, heat pump systems).
- Renewable energy systems (e.g., solar, wind, geothermal).
By enhancing your existing home with energy-efficient upgrades, you not only boost your property's value but also contribute to reducing housing's impact on climate change.
Source: CMHC
Bank of Canada Holds Rate
September 6, 2023The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is also continuing its policy of quantitative tightening.
Inflation in advanced economies has continued to come down, but with measures of core inflation still elevated, major central banks remain focused on restoring price stability. Global growth slowed in the second quarter of 2023, largely reflecting a significant deceleration in China. With ongoing weakness in the property sector undermining confidence, growth prospects in China have diminished. In the United States, growth was stronger than expected, led by robust consumer spending. In Europe, strength in the service sector supported growth, offsetting an ongoing contraction in manufacturing. Global bond yields have risen, reflecting higher real interest rates, and international oil prices are higher than was assumed in the July Monetary Policy Report (MPR).
The Canadian economy has entered a period of weaker growth, which is needed to relieve price pressures. Economic growth slowed sharply in the second quarter of 2023, with output contracting by 0.2% at an annualized rate. This reflected a marked weakening in consumption growth and a decline in housing activity, as well as the impact of wildfires in many regions of the country. Household credit growth slowed as the impact of higher rates restrained spending among a wider range of borrowers. Final domestic demand grew by 1% in the second quarter, supported by government spending and a boost to business investment. The tightness in the labour market has continued to ease gradually. However, wage growth has remained around 4% to 5%.
Recent CPI data indicate that inflationary pressures remain broad-based. After easing to 2.8% in June, CPI inflation moved up to 3.3% in July, averaging close to 3% in line with the Bank’s projection. With the recent increase in gasoline prices, CPI inflation is expected to be higher in the near term before easing again. Year-over-year and three-month measures of core inflation are now both running at about 3.5%, indicating there has been little recent downward momentum in underlying inflation. The longer high inflation persists, the greater the risk that elevated inflation becomes entrenched, making it more difficult to restore price stability.
With recent evidence that excess demand in the economy is easing, and given the lagged effects of monetary policy, Governing Council decided to hold the policy interest rate at 5% and continue to normalize the Bank’s balance sheet. However, Governing Council remains concerned about the persistence of underlying inflationary pressures, and is prepared to increase the policy interest rate further if needed. Governing Council will continue to assess the dynamics of core inflation and the outlook for CPI inflation. In particular, we will be evaluating whether the evolution of excess demand, inflation expectations, wage growth and corporate pricing behavior are consistent with achieving the 2% inflation target. The Bank remains resolute in its commitment to restoring price stability for Canadians.
Information note
The next scheduled date for announcing the overnight rate target is October 25, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report at the same time.
Source: CBC News