CMHC: New federal mortgage program will have minimal impact on prices
Canada's housing agency says the federal government's new mortgage program has limits, but it can work in all markets, including Vancouver and Toronto.
A report from the Canada Mortgage and Housing Corp. yesterday estimates new spending measures aimed at helping first-time buyers afford homes will only push prices up between 0.2 per cent and 0.4 per cent.
It points out that loosening the mortgage-insurance stress test or allowing longer mortgages would have raised housing prices five to six times more than the measures in last month's budget.
The government says it will pick up five per cent of a mortgage on existing homes for households that earn under 120-thousand a year, or 10 per cent for new homes, in exchange for a share of the home's ownership.
There is no interest on the loan, instead C-M-H-C will share in the gains if the home is sold for a profit.
C-M-H-C said it expects the program to launch this September.