Relocation Program
At Group Mortgage Plan, our Mortgage Subsidy Program offers a potentially tax-effective mortgage subsidy that may benefit both Employers and relocating Employees. Our dedicated team of Mortgage Specialists has the expertise and experience to provide tailored solutions for your relocation and mortgage needs.
About — Mortgage Subsidies
A mortgage subsidy is a potentially tax-effective interest rate buy-down for a maximum of 5 years under Canada Revenue Agency (CRA) guidelines, and is potentially a tax-deductible expense for employers.
- Mortgage subsidy can result in lower mortgage payments and carrying costs for the Employee.
- If the Employee is in a 5 year mortgage and transfers again after 3 years then the subsidy can be moved with the Transferee to his/her new property with the Employer’s approval.
- If net interest rate (actual mortgage rate minus mortgage subsidy) stays at or above Prescribed Rate (The prescribed rate is set each quarter and is based on the average rate of 90-day treasury bills during the first month of the preceding quarter), then subsidy is a potentially a tax-free benefit.
Relocation Mortgage Options
Save Time And Money. Group Mortgage Plan offers several types of relocation solutions designed to help both Employers and Employees.
Who: Relocation programs typically apply to permanent salaried Employees transferring from one location to another, within or into Canada.
Why: Our Mortgage Subsidy Program offers a potentially tax-effective mortgage subsidy that can offer significant savings for both employers and employees.
Employer/Company Advantage:
- Elimination of early discharge prepayment costs
- Reduced capital expenditure
- Company costs amortized over period of years
- Potentially a tax effective relocation solution for your Employee
- Potentially a tax deductible expense for your company
Employee Advantage:
- Employee benefits with potentially tax-free interest savings on their home relocation mortgage
- Interest rates can be below Prescribed Rate when properly utilized
- Lower payments and carrying costs for the Employee
The Table below shows the optimal solutions for different relocation scenarios.
Move Within Canada
Existing Mortgage
New Financing Required
If interest rate on existing mortgage is more favourable than current market rates, then mortgage can be ported.
Group Mortgage Plan can provide a 2nd mortgage (at 1st mortgage rates) for the amount of incremental financing needed.
The 2nd mortgage can be subsidized, including the first $25,000 calculated at 0%. The term of 2nd mortgage and payment source can all be matched to 1st mortgage.
Move Within Canada
Existing Mortgage
No New Financing Required
Reassess whether a mortgage ‘refinance’ is economically beneficial.
If refinancing, Employee is eligible to obtain a mortgage subsidy or buydown, including having the first $25,000 of mortgage calculated at 0%, as long as distance to new location is 40km or greater.
Living Outside Canada And Will Be Relocated Back To Canada Shortly
Eligible to subsidize entire new mortgage amount with as much as can be used from alloted subsidy provided by employer.
However, when move originates from outside Canada, CRA does not allow the first $25,000 to be calculated at 0%.
Interest rate can be bought-down below Prescribed Rate.
Move Within Canada
No Existing Mortgage
Will Be Buying Home At Destination
Eligible to subsidize entire new mortgage amount with amount determined by Employer.
First $25,000 of mortgage can be calculated at 0%.
Interest rate can be bought-down below Prescribed Rate.