(Not quite for nothing or free – but nearly!)
The cost of money is still cheap - mortgage rates have been at historical lows, providing great savings for home buyers over these past few years. In fact, one of Canada’s big banks has recently lowered its mortgage rates to 2.99%.
Low mortgage rates are great for both current home owners and first time home buyers. Current home owners that have already entered the market and are building their net worth. They have already dealt with one of the biggest barriers to purchasing a home – the down payment. A down payment is a great challenge for first time home buyers. Most first time home buyers are currently renters, and likely have been for some time. Much of their income goes into rent payments, monthly bills and possibly even the repayment of student loans.
The banks typically require a 20% down payment to qualify for a mortgage. Therefore, to buy a home at $250,000, you would need at least $50,000 to qualify. Thankfully you can turn to the Canadian Mortgage and House Corporation (CMHC) to back your mortgage. If you qualify, you can even reduce the required down payment to around 5% or in this case, $12,500.
Still - $12,500 can be a significant challenge to overcome - but there are even more incentives to help first time home buyers beyond reducing the required down payment. Currently the following programs and incentives are available:
The programs and rebates available to first-time home buyers can really go a long way to making that first house achievable. Combine that with historically low mortgage rates and now may be the best time for you to jump into home ownership. If you are thinking about entering the real estate market, or want more information on how you can take advantage of these programs, don’t hesitate to contact me and I can put you in touch with some great Mortgage People!
(the information provided above is for information only, and all financial questions should be directed to a mortgage professional who can accurately assess the best financing option for your situation)