As expected, the Bank of Canada maintained its target for the overnight benchmark rate at 0.25% on December 9th. This is 8th and the last announcement in year of 2020.

Bank of Canada announces its decision for the overnight rate target 8 times a year. The schedule for 2021 as below:

• January 20
• March 10
• April 21
• June 9
• July 14
• September 8
• October 27
• December 8

The next and first interest rate announcement in 2021 is scheduled for January 21. Most of economist believe that interest rate will stay low until at least 2022.

Effective September 2, 2019, the Government of Canada introduced the First Time Home Buyer Incentive (FTHBI) to help qualified First Time Home Buyers (FTHB) purchase a home, making homeownership more affordable by reducing their monthly mortgage payment without increasing their down payment.  

The FTHBI is considered a Shared Equity Mortgage (SEM) where the Government of Canada has a shared interest in the borrower's property value. This program is available through the default insurers; Canada Mortgage Housing Corporation (CMHC), Genworth and Canada Guaranty. Borrowers will receive an incentive in the form of an interest-free loan towards their down payment:

• 5% for the purchase of a resale property OR
• 5% or 10% for the purchase of a new construction home

The loan has no monthly payment. Repayment amount will be based on fair market value to be determined at the time of repayment.

• Repayment will be required when the property is sold or at the end of the 25-year term, whichever happens earlier.
• Voluntary repayment of the full incentive can be made without any prepayment penalties.

You are considered a Frist Time Home Buyer if you meet one of the following qualifications:

• You never owned a property before.
• You've recently experienced a breakdown of a marriage or common-law partnership.
• In the last 4 years, you did not occupy a home that you or your current spouse/common-law partner owned.

Program Eligibility

• The borrower must be a Canadian Citizen, Permanent Resident or Non-Permanent Resident who is legally authorized to work in Canada.
• Property must be owner occupied and located in Canada.
• Borrowers must contribute the minimum required down payment (5%) from traditional sources.
• Borrower's annual household income does not exceed $120,000.
• The closing date must be on or after November 1, 2019.
• Only High Ratio mortgages (greater than 80% Loan-to-Value) are eligible.

To find out whether you can be qualified for the FTHBI, you may use Government of Canada's online calculator tool.

For more detailed information, please speak to Sean @ Valueland Mortgages at toll free number: 1-877-479-9998.