The B.C. government's Home Owner Mortgage and Equity Partnership program, launching January 16, 2017, might seem almost too good to be true. The provincial government will match the down payment for eligible first-time home buyers to a maximum of 5% of the purchase price, up to a $750,000 property. This loan will be interest- and payment-free for the first five years.
Beginning on the fifth anniversary - year 6 of the loan - you will need to make monthly payments (principal and interest) at a rate outlined in the Conditional Loan Approval letter issued by the government. While you aren't required to make any payments in the first five years, you may choose to repay the loan in full or in part at any time with no penalty.
One key point to note is that you must be approved for a high ratio (less than 20% down payment) insured first mortgage - and your mortgage insurance premium may be affected by using the BC HOME Partnership Loan in the down payment. CMHC considers the loan to be a non-traditional source of down payment, so if you are using the loan to make up your minimum (i.e., 5% total) down payment, your mortgage insurance premium would be set at a slightly higher rate. If you have at least 5% of your own funds for the down payment and will be using the loan to "top up" that amount, your mortgage insurance premium will fall under the rate table for a traditional down payment.
Realistically, the difference in your mortgage payment will be minimal, but it may be an important consideration for you when choosing whether to apply for the program. If you have questions about your specific situation, contact Auxilium Mortgage today for a free consultation with one of our brokers: call Toll-Free 1-855-590-6520 or visit us at 307 Goldstream Avenue during regular business hours, Monday through Friday 8:30 a.m. - 5:00 p.m. We can also arrange an appointment evenings or weekends to work with you.
or Read the Top 10 Things You Need to Know About the BC HOME Partnership Loan
Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.
