The Canada Mortgage and Housing Corporation (CMHC) doesn’t want Canadians to worry about the new First-Time Home Buyers Incentive (FTHBI) making housing any more unaffordable than it already is.
In a statement on April 4, Canada’s housing agency said the inflation effect of the FTHBI is unlikely to exceed 0.2 to 0.4 per cent.
According to the CMHC, more drastic measures, like loosening up on the mortgage stress test or increasing amortization periods would have led to a much larger increase.
The government’s housing plan, which was released last month, sees buyers with a household income of less than $120,000 receive five per cent off of their mortgage on an existing home from the CMHC. Ten per cent of the mortgage on a new home is also covered under the new rules, so long as the home is priced under $480,000.
On Wednesday, the CMHC also announced plans to raise an additional $100 million for national housing. The Crown Corporation told Canadian Press that despite the government’s $40-billion housing strategy, the investments aren’t enough.
CMHC chief executive, Evan Siddall, says the $100 million will most likely come from private sources and will be used to boost affordable housing initiatives.