But he reserves judgement until final details are released
The federal government’s First-Time Home Buyers Incentive may help new homebuyers, but one Newfoundland and Labrador broker is saying that more can still be done.
Under the incentive, the Canada Mortgage and Housing Corporation (CMHC) will provide up to 10% on the purchase price of a new build and 5% on a resale. But Saint John’s mortgage broker Leslie Penney told CBC News that mortgage terms could still be extended from 25 to 30 years to make it even more affordable.
Read more: First-Time Home Buyer Incentive reduces qualifying power
"When this announcement was released, it was a little bit off the mark for what we were pushing for as an industry," Penney, a broker with East Coast Mortgage Brokers, told CBC News.
"With regard to the rules around that, the maximum household income is $120,000 and the maximum purchase price would be four times that, so you take something around the $500,000 mark, that's a great opportunity for anyone in this market," he said.
"But when you take the larger markets, we'll say in Toronto or Vancouver where the average price is $750,000, that doesn't even scratch the surface."
Penney also said that, until the details are released, the incentive was still unclear on several matters. “From a homeowner's perspective, you've got the government with, essentially, an equity stake into your home," Penney told CBC News.
"So some of the clarity we're waiting to hear on — is it just a set amount up front, or as the equity increases or decreases in your home, is that shared as well?"
"The big thing from our perspective as brokers is that if you're going to save this money on your mortgage up front, you want to be smart with that and either pay down debt or save it, not just dwindle it away,” he concluded.
