First Time Home buyer Incentive Program

First-Time Homebuyer Incentive Program

01.17.2020 | Buyer Programs

The Canadian Government’s First-Time Homebuyer Incentive Program

For qualified buyers, the Canadian government offers certain incentives to help make the process of buying a home simpler. More specifically, the First-Time homebuyer Incentive Program is a way to ensure you can afford your first purchase as soon as today.

What Is The First-Time Homebuyer Incentive Program?

The first-time homebuyer incentive program is a shared-equity mortgage with the Government of Canada. Think of it as the Canadian government making an incentive in you, as a buyer, in the purchase of your greatest asset: your new home.

It’s an opportunity to reduce the size of your monthly mortgage payments while still allowing you to purchase a home anywhere in the GTA (and beyond).

The program offers:

  • 5% or 10% for a first-time buyer’s purchase of a newly constructed home
  • 5% for a first-time buyer’s purchase of a resale (existing) home
  • 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

The Canadian government’s investment in your home directly reflects its investment in the overall housing market. By obtaining the incentive, you may be able to increase your money down – thereby pushing down the amount of the payments you make monthly.

Who Can Qualify For The First-Time Homebuyer Incentive Program?

To be eligible for the program:

  • you must meet the minimum down payment required to purchase a home 
  • access funds for the down payment from savings, RRSP’s, or non-repayable financial gift from an immediate family member
  • be a Canadian citizen, permanent resident or non-permanent resident who is authorized to work in Canada
  • live full-time in Canada
  • you or your partner must qualify as a first-time homebuyer
  • your or your partner’s qualifying income can’t exceed $120,000
  • your mortgage cannot be more than four times your income

Note: The home you purchase under the First-Time Home Buyer Incentive program can not be used as an investment property.

How Do You Pay It Back?

The incentive is contingent upon paying back the Canadian government, based on the property’s fair market value, at the time of repayment. If you require a 5% incentive, you will need to pay back 5% of your home’s worth whenever that payment is due.


Jennifer purchased a resale home for $490,000 and saved the minimum down payment required of $24,500 (5% of the purchase price). She decided to participate in the First-Time Home Incentive Program and received $24,5000 in a shared equity mortgage (5% of the resale home cost).  The additional down payment has reduced Jennifer’s mortgage monthly mortgage payments.

Five years later, Jennifer sells her home for $620,000 and is required to repay the incentive as a percentage of the home’s current value.

She would have to repay 5% of $620,000 or $31,000 when selling her home.

Essentially, you have 25 years to pay back your incentive (or when the property is sold, whichever comes first). You can also pay it back, anytime, before then (without penalty).

The incentive will have to be repaid in the following circumstances:

  • You want to port your mortgage to purchase another property.
  • A change of use of the property.
  • You want to buy out the co-borrower.

Is This Incentive Right For You?

Ask the experts to find out! We can help you understand if this incentive is the right move for your purchase and if buying a home right now in Brampton, Caledon, Mississauga, or across the GTA is the wisest move for your future.

Please, use the form to reach out today. We’d love to help.

© 2023 - Keith & Franҫoise - EXP REALTY, BROKERAGE Made by Artifakt Digital