It's been a few days now since the news was announced that this new program will launch as of September 2nd, 2019, and it will allow new first time home owners to take part in what the government is calling a "shared equity program."

This is not applicable for everyone however if you are a person that meets the requirements of eligibility the government would provide an interest free loan for between 5%-10% of the homes price up front which will reduce monthly payments to make it a little easier to make payments on a monthly basis.

In return the government has that same percentage stake in the home which must be repaid back upon the sale of the home or in 25 years, whichever event comes first. The repayment is based on the percentage value of the home at the time of the sale or the 25 year end date.

This means that if the home value goes up in value you would have to repay back the original 5% as well as 5% of the total increase in value. On the flip side, if the market value was lower at the time you would pay back the amount less 5% of the drop in market value.

Some of the requirements are:

- Buyers must have a household income below $120,000 a year

- The amount of insured mortgage plus incentive would be maxed at 4 times the home buyers annual incomes, so up to $480,000. (That means the most expensive home you can buy with this plan would be worth between $500,000 to $600,000. Depending on the size of your downpayment.

Here is more details including a great video with discussion on the topic:

https://globalnews.ca/news/5393428/first-time-home-buyer-incentive-details/

At the end of the day this program will be suitable for some but not for all...

If you have questions whether this program would benefit you, feel free to reach out and our mortgage specialist can go through whether this may be a good option for you. 

Ps. We would love to hear your thoughts on this program so we can have a better idea of what the feelings are around this program. What do you think?