Our Blog

Weekly Rate Advisor March 25,2019
March 22, 2019 @ 6:00 PM by:

Hoping for minor tweaks to the mortgage stress test, the Liberal government’s 2019 budget instead left many in the industry underwhelmed and with more questions than answers.
The Stress Test was left untouched, and instead Finance Minister Bill Morneau announced two key changes aimed at easing affordability for new homebuyers:


  • Introduction of the First-Time Home Buyer Incentive (FTHBI)
    • A new initiative that will see the CMHC provide 5% of your down payment for the purchase of existing homes, or 10% for the purchase of a new build
    • The mortgage must be default insured
    • Your income must be less than $120,000
    • No monthly payments are required, and this amount can be paid back at any time, or upon the sale of the house
    • “There will be some sharing of upside and downside,” Morneau told reporters
    • The insured mortgage plus incentive cannot be more than four times the participants’ household income
    • Effective as of September 2019
  • Increasing the RRSP Home Buyers’ withdrawal limit to $35,000 from $25,000
    • Permits two first-time buyers in the same household to combine withdrawals for up to a $70,000 down payment

RBC Capital Markets Senior Economist Robert Hogue. “First-time homebuyer activity is poised to slow down between now and September 2019, as many house-hunting millennials await more details and crunch their numbers,” he wrote. “This could depress the market even further during that period.”

Mike Kazarian