You probably heard in the news about a new shared equity mortgages program announced in 2019 budget.
It will provide a first time home buyer with additional 5% downpayment on resale properties and 10% on new builds.
Again, they release a program without a clear guidelines on how it will work.
The rules as we know so far:
- Must be insured by CMHC
- First time home buyers only
- Household income under $120,000
- Maximum mortgage amount $480,000
Leaves many questions unanswered.
- Must pay back 5-10% of the future sale price or initial amount?
- What happens if the sale price is lower?
- Will they pay part of property taxes, maintenance or condo fees?
- Any improvements will increase value, how will that be reflected?
- Clients still pay full closing costs and land transfer taxes?
- CMHC is not the only mortgage isurer, will the other insurance companies be able to participate?
Still too early to tell, but we don’t expect it to have a significant impact on GTA.