• Tammy Andreakos

First time home buyers incentive..there's an app for that!

Updated: Nov 18, 2019

Want to find out how much you could get from this new program, check out the First-Time Home Buyer Incentive Benefit Calculator

Created by entrepreneur Alex Leduc this new app coined Mortgauge can assess the potential costs and benefits of the first-time buyers incentive and whether or not lower mortgage payments in the short-term are worth the payback in equity if your home’s value appreciates.

This new incentive program put in place by the federal government could help some buyers lower their monthly mortgage payments. But with property prices still rising in the Toronto area and interest rates remaining at historic lows, some calculations are needed to ensure it actually makes sense for your financial situation.

The same applies to doing renovations on your new home. If you’re going to be repaying the incentive any alteration to your home that end up increasing the value, part of that increase you will have to pay back.

“Our goal is to help new home buyers assess not just how much interest they would save, but also how much property value they need to give up for those interest savings,” Leduc said.

The incentive was put in place by the Liberal government in its 2019 budget to help all new home buyers with the challenging road to owning a home. The incentive offers interest free loans on up to 5 per cent of the purchase price of a resale home or up to 10 per cent of a new construction property. It applies to buyers with a maximum household income of $120,000 and a minimum down payment for an insured mortgage on a home valued at no more than $560,000.

Homebuyers need a minimum down payment of at least 5 per cent on homes valued at up to $500,000 and no more than 20 per cent to qualify for mortgage insurance.

In this years election the Liberals also pledged to increase the maximum allowable purchase to $789,000 and raise the household income qualification to $150,000.

Currently you can get funded at 2.4% on a five-year fixed mortgage. But what happens if interest rates increase to 3.5%? The interest rate the more a buyer will save from using the incentive.

If you are looking for help buying, selling or investing in real estate myself and my real estate team are here to help. We specialize in real estate in Aurora, real estate in Newmarket, real estate in Richmond Hill and real estate in Vaughan. We also help with investing in real estate in pre-construction condominiums all over Toronto and the GTA. Whatever your direction in real estate, you can always turntotammy.

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