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First Time Home Buyers Incentive

What is the Incentive? 


The First-Time Home Buyer Incentive makes it easier for you to buy a home and lower your monthly mortgage payments. This program is a shared equity mortgage. This means that the government shares in the upside and downside of the property value. It allows you to borrow 5 or 10% of the purchase price of a home. You pay back the same percentage of the value of your home when you sell it or within a 25-year window.

It works like this:


  • You receive a 5% incentive of the home’s purchase price of $200,000, or $10,000. If your home value increases to $300,000 your payback would be 5% of the current value or $15,000.
  • You receive a 10% incentive of the home’s purchase price of $200,000, or $20,000 and your home value decreases to $150,000, your repayment value will be 10% of the current value or $15,000. 


Just as the name implies, this incentive is for first-time homebuyers. You’re considered a first-time homebuyer if:

  • you have never purchased a home before
  • you did not occupy a home that you or your current spouse or common-law partner owned in the last 4 years (the 4-year period begins on January 1 of the fourth year before the Incentive is funded and ends 31 days before the date the Incentive is funded) 
  • you have recently experienced the breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time home buyer requirements)



Do I Qualify? 


These are a few criteria to determine your eligibility for the First-Time Home Buyer Incentive: 

  • your total annual qualifying income doesn’t exceed $120,000
  • your total borrowing is no more than 4 times your qualifying income 
  • you or your partner are a first-time homebuyer
  • you are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada
  • you meet the minimum down payment requirements with traditional funds (savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member)


The Incentive is like a second mortgage on your home. Your first mortgage must be greater than 80% of the value of the property and is subject to a mortgage loan insurance premium. It also must be eligible through Canada Guaranty, CMHC or Genworth.


The insurance premium is based on the loan-to-value ratio of the first mortgage only. That is, the first mortgage amount divided by the purchase price. You don’t pay mortgage insurance on the incentive – it is included with the total down payment.


The type of home you plan to purchase plays a factor. The table indicates the type of home that qualifies for the incentive and how much of an incentive it may be eligible to receive.


PROPERTY TYPE INCENTIVE AMOUNT (%)

- New Construction 5% or 10%

- Existing Home 5%

- New and existing mobile/manufactured home 5%

- Residential properties can have 1 to 4 units and include: 

  • single family homes 
  • semi-detached homes 
  • duplex 
  • triplex 
  • fourplex 
  • town houses 
  • condominium units 
  • mobile homes


Other details you need to know

The Incentive may be associated with additional costs:

  • Additional legal fees: Your lawyer is closing 2 mortgages so you may be charged higher fees.
  • Appraisal fees: To repay your incentive, you may need to have an appraisal done to determine the fair market value of your home.
  • Other fees: Additional fees may be incurred throughout the life cycle of the incentive, like switching your first mortgage to a new lender or refinancing your first mortgage.
  • Property Insurance premiums: Additional costs may be incurred to account for an additional mortgage registered on the property. Talk to your insurance broker or insurance provider to find out more details.


Information Source: Government of Canada, National Housing Strategy

Full article and information can be found here: https://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive


Use this information as a starting point.  We cannot be held responsible for any errors, omissions or fat finger typing in these articles.  Please do your own due-diligence as this information may be outdated. 

Find out more here:

Click below to check out the eligibility and savings calculator.  This will pop up in a separate page. 

Eligibility and Savings Calculator
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