Discussions

Will banks use your CCTB as income when applying for a mortgage?

Just went through this and they won’t accept it because it changes every year

It’s time to renew and was hoping the CCTB might qualify me to borrow a bit more to pay off a credit card.

Not only does it change year to year, but any new government could take it away or drastically change it too

Mortgage broker here. There are several banks accepting CCB as qualifying income for a mortgage. You can give me a call if you would like to discuss your options. - Jeremy McPhee (204) 720-7433

https://mymortgage.ca/resources-links/application-check-list.html  
 
They might consider the income if under the age of 12.

I thought we get CCB till they were 18?  
 
I’m still working on this but would be helpful if the bank would take this as a source of income!

The CCB (formerly the CCTB, formerly the CTB, formerly the CTC, formerly the Family Allowance) is traditionally not used for qualifying incomes for a few reasons.  
 
The original intent of the payments, at least since the CTC days (mid-90's), was to basically disburse basically a tax equalization payment to the lower income earners. However, with other tax distribution schemes, instead of distributing it on the tax return it was sent as monthly payments. Normally, something like a tax refund wouldn't be considered in a mortgage calculation as it doesn't form part of your income, it's simply a reimbursement for overpaying your taxes.  
 
Since at least the CTB days (late 90's), in addition to being a tax distribution benefit, it has the specific stated intention of being a payment to aid in the care and nurturing of children under the age of 18. In other words, while the funds are paid to the parents and for the intention of providing care for their children, the money isn't the parents' per se. As such, it was not intended to form a part of the parents' income in calculation purposes.  
 
However, when social assistance was revamped in the early 2000's, the then-CCTB began being counted as income and the social assistance payments were adjusted accordingly. This was supposed to save the provinces money as they could pay out less to parents with children in their care as they would get some of their support via the federal government instead of entirely from the province.  
 
So now we get to today, where the CCB forms a significant part of many households' income. Should it be counted as income for borrowing purposes? Hard to say. There's good arguments either way.

I *highly* disagree on it forming a significant part of many households. We get less than $200/month and have 3 children under the age of 18. I would lean more  
Towards those that rely on the CTB as a significant source of income are likely not home buyers as it would be quite difficult to save a down payment with a rather low monthly household income.

Most banks offer a cash back at renewal option. May have to pay an inflated interest rate- though would be cheaper than credit card debt/interest.  
Speak to your advisor before your renewal date so you can go through all your options.

I used to work for CRA back when it was CCTB - believe me, it makes a significant part of many households. If you only get $200 with 3 children, you have a fairly large household income to begin with. But the thresholds are surprisingly high, and with more children the amount increases quite a bit.  
 
You would be surprised how many of those are homeowners. The path to home ownership isn't always linear.  
 
Some of these families might be divorced parents who retain the family home after separation.  
 
Some scrimp and save to buy, trying for a better life for their kids.  
 
Some had 2 incomes when they bought their home, but opted to have a parent stay at home and therefore eliminated an income (with the CCB helping make that possible).  
 
Some are new Canadians with multiple generations living in the same household, each contributing to make the payments.  
 
Some get extra CCB money because they have a disabled child, and it helps provide them with a better quality of life.  
 
So it is possible, for many families, for the CCB to make up a significant part of their household income, to still be homeowners, and not necessarily be classed as "low-income", or even if they are to still be home owners.