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The first-time homebuyer incentive has been discontinued by the Canada Mortgage and Housing Corporation (CMHC), the federal agency announced recently. The deadline for new or resubmitted applications to the program is midnight ET on March 21, 2024, according to the CMHC’s website.
The program was launched in 2019. The plan was meant to help reduce monthly mortgage payments for first-time home buyers by having the government take on partial ownership of a property. The government offered a loan up to 10 per cent of the purchase price that would go toward a larger down payment and thereby reduce monthly payments.
Homeowners have to repay the incentive after 25 years or when the property is sold, with the amount owing adjusted to reflect how the value of the property has changed. The First-Time Home Buyers’ Plan (HBP) offered several advantages for those looking to make their first home purchase. It was particularly beneficial for first-time buyers who may find it challenging to save a substantial amount for a down payment.
The HBP promotes home ownership by making it more financially accessible. It’s worth noting that while there are advantages, potential homebuyers should carefully consider their financial situation, as there are specific eligibility criteria and conditions associated with the plan.
The First-Time Home Buyers’ Plan can be a valuable tool for easing the financial burden of a down payment, enhancing accessibility to home ownership, and supporting long-term financial goals through a structured repayment approach. Prospective buyers should consult with financial advisors to determine if it aligns with their specific circumstances and goals and also if they can still meet the March 21st deadline for discontinuing the plan by the Canadian government.
If you missed the FTHBP you may consider knowing how to prepare yourself before you have a meeting with your mortgage broker.
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