We just caught wind of an unprecedented first-time homebuyer program – unfortunately, it’s not offered in the Greater Toronto Area (GTA) or even Canada for that matter. You’ll have to become a citizen of Ireland to take advantage of this one.
The Rebuilding Ireland Home Loan offers government backed mortgages for eligible first-time buyers. The program is designed for those who don’t qualify for social housing but also can’t afford to enter the market (apparently Ireland’s housing prices are on the rise, partially due to a lack of supply…sound familiar?).
The loans can go towards homes valued up to €320,000 ($488,800 CAD) in Greater Dublin, Cork, and Galway, and up to €250,000 ($381,875 CAD) in the rest of the country.
To be eligible, a single person’s annual income must not exceed €50,000 ($76,375 CAD), and for a joint application, the annual household income must not exceed €75,000 ($114,562 CAD).
The thing that makes this program really stand out is the fixed rate of 2% to 2.25% for the entirety of the mortgage length, which is from 25 to 30 years. Imagine having the comfort of knowing your monthly payments for the foreseeable future! Also, those rates are pretty great.
The first-time buyers must have at least 10% down (meaning up to 90% is mortgageable), and the loan can be applied to new construction, resale, or custom homes.
The eligibility outlines go into more detail on the Rebuilding Ireland website. Another thing that stands out is that the borrower must have proof that they have been rejected by two different lenders.
“What this means essentially is that a person or couple can purchase a home, while ensuring that they can still keep their monthly repayments to one third of their net disposable income – with no risk of their mortgage rate rising and so no threat to their ability to afford repayments, giving them certainty and security,” says Housing Minister, Eoghan Murphy.
Would this program work in Ontario? There are probably hundreds if not thousands of prospective first-time buyers in the GTA that make under $76,375 a year and there are probably even more couples that make less than $114,562 a year.
Plus, with the new stress test for uninsured mortgages and rising interest rates, even more first-time buyers are going to be blocked out of the market as prices continue to rise.
Even the home value maximums apply to condo prices in the GTA. Imagine having $48,000 to put down on a $480,000 condo unit in Toronto, then only paying 2% interest for the entirety of your amortization. That’s a dream come true.
Don’t get us wrong, urban areas like Toronto definitely need affordable/social housing assistance, but there are the buyers in between poverty and wealthy, the lower-middle class, that are struggling to become homeowners. It seems like a program like this is worth investigating.
Ireland has set €200 million ($305 million CAD) aside to launch the program, which will ideally equal 1,000 loans. The Rebuilding Ireland Home Loan will be available February 1, 2018.