Say What Now?

The homebuyer measures unveiled in yesterday’s federal budget increase your ability to borrow...from your RRSP and from the Canadian government, not from mortgage lenders. 

These initiatives can put on an “equity” hat and look good; and, they do nothing to normalize your borrowing power. For better or for worse, Canadian homeownership begins with REAL leverage; and historically, Canadians have been pretty damn good at managing mortgage debt - stress test or not. But I digress.

I’m AOK with the increase in the HBP’s maximum RRSP withdrawal to $35,000 from $25,000 in that ultimately, you’re borrowing tax-deferred dollars from yourself. 

As for CMHC’s planned First Time Home Buyer Incentive, program details will come out in the next few months...my $0.02 today? Given a limit of $480,000, the incentive won't be nearly as useful in the Greater Vancouver Area. 

Geography aside, what's your first impression of “going in on a place” with a Crown corporation? Like CMHC literally being on title with you, without even getting into the dynamics of CMHC’s “equity” in a home that could go up or down in value? 

Time will tell what Canadians think. All I know is, the BC government tried a variation of this and it got shuttered after a year, due to insufficient interest. Insufficient meaning, they got less than a quarter of the applicants they expected, annualized. Remember?

I remember; and that’s at least one reason why I have NO intention of endorsing this federal program.