The federal budget provides some much needed help to buyers in expensive real estate markets in Canada – namely the GTA and Vancouver regions.
The $1.25 billion-dollar program allows prospective real estate buyers that have a minimum down payment for a home to finance between a 5 and 10 percent of the mortgage through a shared equity program that is run by the Canadian Mortgage and Housing Corporation.
This equity applies to first time buyers maker $120,000 or less and is expected to benefit 100,000 Canadians.
While it may seem a bit complicated, the key takeaway is that the new financing opportunities should help to increase the supply and affordability of new homes.
Another change is that individuals can borrow up to $25,000 from their RRSP while couples can borrow up to $70,000. This money can be applied to a down payment to help first-time buyers qualify for a mortgage.
To incentivize more housing supply, the government will also enable favourable financing for housing developers that build affordable rental units.
About 42,500 homes are expected to be built due to the various programs announced in this year’s budget.
As housing remains a key concern for many Canadians, this budget should help to provide some relief.
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