Mortgage Rates on the Rise: Proposed GST Rebate Could Offer Relief for First-Time Homebuyers

For first-time homebuyers considering new construction homes, the prospect of increasing mortgage rates may be concerning. However, a proposed rebate on GST for new home purchases could potentially lower mortgage costs for eligible buyers. According to the Parliamentary Budget Officer, the Liberal's plan to rebate some or all GST charges for first-time homebuyers purchasing new construction homes below $1.5 million will save an average of roughly $27,000 for eligible buyers.

Key Takeaways:

• The proposed GST rebate for first-time homebuyers purchasing new construction homes below $1.5 million could save an average of $27,000, according to the Parliamentary Budget Officer.
• The impact of the rebate is expected to be limited, with less than 5% of new construction sales expected to qualify for the program over the next six years.
• Eligible buyers could stand to save a maximum of $50,000 on a $1-million home as a result of the policy.
• A study by Desjardins found that the rebate could save eligible buyers approximately $240 in mortgage payments a month.
• Mortgage rates are sourced by Ratehub.ca, which provides a comprehensive list of today's mortgage rates for each term/type.
• The proposed GST rebate has only begun working its way through parliament.

Statistics:

• Average savings: $27,000 for eligible buyers (Parliamentary Budget Officer)
• Maximum savings: $50,000 on a $1-million home
• Mortgage rate savings: approximately $240 in mortgage payments per month (Desjardins study)
• Impact: less than 5% of new construction sales expected to qualify for the program over the next six years
• Mortgage rates sourced by: Ratehub.ca (as of market close on June 12)

Sources:

• Parliamentary Budget Officer (PBO)
• Desjardins
• Ratehub.ca