When the value of the property increases or decreases
However, in exchange for its stake, CMHC would get to participate “in the upside and downside of the change in the property value” — which means they would be entitled to any corresponding increase in the value of a home when the buyer eventually sells. On the flip side, the government would also on the hook for any share of the loss if the property depreciates.
On a home costing $500,000, if the borrower puts up $25,000 and CMHC puts up the same amount, CMHC would then own 5% of that home. So if the house appreciates to $600,000 and the borrower wants to sell, they would have to give CMHC 5% of the sale price — $30,000 in this example — not the $25,000 CMHC put down in the first place.
While a bill would be paid down the line, the savings over the years could add up. In the example above, the program would save a would-be borrower $286 a month in mortgage costs over the life of the loan, $3,430 a year.