- Over half (52 per cent) of potential first-time homebuyers
say they are likely to use the new FHSA
- About two thirds (69 per cent) of Canadians say they are not
knowledgeable about the account
- Almost one quarter (24 per cent) of parents are likely to
use the account to help their children save for their first
home
TORONTO, Dec. 7, 2023
/CNW/ - BMO's 14th Annual Investment Survey reveals that
while there is growing awareness of First Home Savings Accounts
(FHSA), there is a knowledge gap when it comes to understanding the
account.
The survey reveals over half (52 percent) of Canadians looking
to buy a home for the first time are likely to use the FHSA to help
save for their home purchase, and almost quarter (24 per cent) of
parents are likely to use the account to help their children save
for the down payment of their first home. While many of the
potential Canadian first-time homebuyers polled want to take
advantage of the account, the survey also found 69 per cent of
Canadians lack knowledge about the account.
"Homeownership continues to be an important milestone for many
Canadians and their families and using all available tax advantaged
accounts like the FHSA makes that a little bit easier,"
said Nicole Ow, Head, Retail Investments, BMO. "For those
saving for their first home, Canadians should work with a
professional advisor to help them understand the investment
strategies available for this account and build a financial plan
that will help them stay on-track towards their ultimate goal of
home ownership and make real financial progress."
"Housing affordability is a problem facing many Canadians, and
the FHSA is one way Canadians can work toward saving for that down
payment to buy their first home," said Robert Kavcic, senior economist, BMO.
"While there are several economic forces working against people
saving for their first home, the FHSA is one tool that can help
people meet their savings goals and a program people should take
note of when putting a plan together."
The FHSA combines some of the benefits of a Registered
Retirement Saving Plan (RRSP) and a Tax-Free Savings Account
(TFSA). The FHSA allows investors to hold several asset types
within the account, which may include cash, GICs, ETFs, mutual
funds or specific securities like stocks or bonds. FHSA
contributions are tax-deductible, earnings are tax-sheltered, and
withdrawals are tax-free when used towards qualified first-time
home purchases. First-time home buyers can contribute up
to $8,000 a year and that yearly contribution limit can
be carried forward, with a lifetime contribution limit
of $40,000.
BMO also offers tools and resources to help customers throughout
their homebuying journey:
- BMO SmartProgress: Customers can learn more
about FHSAs in a new learning module available in BMO
SmartProgress' homeownership playlist. BMO SmartProgress is an
online education platform where Canadians can learn more about how
to manage their finances.
- Pre-Approval: For homebuyers, getting
pre-approved provides a cushion for due diligence when purchasing a
home. In addition to visiting a local branch to speak with an
advisor, BMO allows homebuyers to apply for mortgage pre-approval
online. To give extra time for house-hunting, BMO offers the
longest rate guarantee period at 130 days of any major Canadian
bank (as of September 5, 2023).
- Pre-Qualification: To get started with their
homebuying journey, prospective homebuyers can get a mortgage
estimate in one minute with a 130-day rate hold. Using a soft
credit check that will not affect their credit scores, customers
will be able to know how much they can potentially afford for a
home, based on information such as income, assets and debt.
For more information about BMO's FHSAs, please
visit: www.bmo.com/fhsa.
About BMO Financial
Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of
$1.3 trillion as of October 31, 2023. Serving customers for 200 years
and counting, BMO is a diverse team of highly engaged employees
providing a broad range of personal and commercial banking, wealth
management, global markets and investment banking products and
services to 13 million customers across Canada, the United
States, and in select markets globally. Driven by a single
purpose, to Boldly Grow the Good in business and life, BMO
is committed to driving positive change in the world, and making
progress for a thriving economy, sustainable future, and inclusive
society.
SOURCE BMO Financial Group