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Home Buying

First-Time Home Buyer Incentive set to help Peace Country buyers

Jun 20, 2019 | 11:59 AM

A new program being rolled out by the federal government is helping ease the burden on first-time home buyers.

Starting September 2, households that earn $120,000 per year or less will be eligible to apply for a shared equity loan from the federal government, known as the First-Time Home Buyers Incentive.

Under the program, the government would provide an additional five percent on top of the five percent down payment, going up to 10% for new builds, as a way to lower mortgage payments for first-time buyers. The price of the home cannot exceed four times the qualified household income.

The loan would be offered interest free, be payable within 25 years or when the house is sold, and have no payment-plan during that time. There will also be no penalty on early payouts.

This is a positive program for buyers in the Peace Region according to the President of the Grande Prairie and Area Association of Realtors Lesley Craig,

“Our average price bounces around the $300,000 mark and we find a majority of our first-time buyers are spending between $250,000 to $350,000,” said Craig. “So, they definitely fit within that criteria to be able to take advantage of that.”

Craig also sees this program as somewhat of a balancing measure to the mortgage stress test brought about in 2018, which made it more difficult for buyers to enter the market.

“This will make things a little bit easier again,” said Craig. “What we kind of lost in the last year or two it will help, maybe, bring some of that back. Or, bring more buying power back to our buyers.”

The federal government has also upped the amount of withdrawal buyers can utilize from their RRSPs to make the minimum five percent down payment on their mortgage, raising the maximum from $25,000 to $35,000.

“In our Grande Prairie area, we are really lucky. We have lots of jobs, our economy is doing well, interest rates are really low, and prices are affordable for houses,” said Craig. “This is a great time for people to contact their favourite realtor and get into the housing market.”