The Canada Mortgage and Housing Corporation (CMHC) doesn't want Canadians to worry about the new First-Time Home Buyers Incentive (FTHBI) making housing any more unaffordable than it already is.

In a statement on April 4, Canada's housing agency said the inflation effect of the FTHBI is unlikely to exceed 0.2 to 0.4 per cent.

READ: Federal Budget 2019: New Incentives For First-Time Buyers

According to the CMHC, more drastic measures, like loosening up on the mortgage stress test or increasing amortization periods would have led to a much larger increase.

The government's housing plan, which was released last month, sees buyers with a household income of less than $120,000 receive five per cent off of their mortgage on an existing home from the CMHC. Ten per cent of the mortgage on a new home is also covered under the new rules, so long as the home is priced under $480,000.

READ: CMHC Aims To Raise An Extra $100M For Housing On Top Of Gov’t Funds

On Wednesday, the CMHC also announced plans to raise an additional $100 million for national housing. The Crown Corporation told Canadian Press that despite the government's $40-billion housing strategy, the investments aren't enough.

CMHC chief executive, Evan Siddall, says the $100 million will most likely come from private sources and will be used to boost affordable housing initiatives.

NOTE: An earlier version of this article incorrectly stated that the CMHC predicted prices will go up by 0.2-0.4 per cent. The CMHC actually stated they are not expecting prices to increase by more than 0.2-0.4 per cent in response to the new first-time home buyers incentive.

Real Estate News