First-Time Home Buyer Incentive from Federal Government

Middle Class Canadians to Buy their First Home

Quick Facts about the First Time Homebuyer Incentive:

  1. Canada’s First-Time Home Buyer Incentive will help qualified first-time homebuyers purchase their first home as the incentive reduces their monthly mortgage payment, without increasing the amount that they must save for a down payment. The program will launch on September 2, 2019, with the first closing on November 1, 2019.
  2. The incentive will allow eligible first-time homebuyers who have the minimum down payment for an insured mortgage with CMHC, Genworth or Canada Guaranty, to apply to finance a portion of their home purchase through a form of shared equity mortgage with the Government of Canada.
  3. For the purchase of an existing home, an incentive amount of 5 percent may be available. For the purchase of a newly constructed home, an incentive amount of 5 percent or 10 percent may be available.
  4. Doubling the incentive for purchasers of new homes encourages new housing supply.
  5. No on-going repayments are required, the incentive is not interest bearing, and the borrower can repay the incentive at any time without a pre-payment penalty.
  6. The government shares in the upside and downside of the change in the property value.
  7. The buyer must repay the incentive after 25 years, or if the property is sold.
  8. The incentive will be available to first-time homebuyers with qualified annual household incomes up to $120,000. At the same time, a participant’s insured mortgage and the incentive amount cannot be greater than four times the participant’s qualified annual household income.
  9. Per the table below, for a family buying a $500,000 home, this program could save them as much as $286 per month or more than $3,430 a year (note: for illustration purposes only, results subject to change depending upon amortization, interest rate, term, etc.).
without FTHBIwith FTHBIwithout FTHBIwith FTHBIwithout FTHBIwith FTHBI
House Price$200,000$200,000$350,000$350,000$500,000$500,000
Down Payment (5%)$10,000$10,000$17,500$17,500$25,000$25,000
FTHBI (10%)NA$20,000NA$35,000NA$50,000
Insured Mortgage$190,000$170,000$332,500$297,500$475,000$425,000
Insured Mortgage + Mortgage Insurance Premium$197,600$174,760$345,800$305,830$494,000$436,900
Monthly Payment*$989$875$1,731$1,531$2,473$2,187
Savings on Monthly Payment$114$200$286
Savings on Yearly Payment$1,372$2401$3,430

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