The First-Time Home Buyer Incentive

The Incentive enables first-time homebuyers to reduce their monthly mortgage payment without increasing their down payment. The Incentive is not interest bearing and does not require ongoing repayments.

Through the First-Time Home Buyer Incentive, the Government of Canada will offer:

1. 5% for a first-time buyer’s purchase of a re-sale home
2. 5% or 10% for a first-time buyer’s purchase of a new construction

Funding Available: The total amount of funding will be $1.25 billion over 3 years.

Note: The program is expected to be ready to receive Incentive applications starting September 2, 2019. If approved for the Incentive, the purchase transaction must close on or after November 1, 2019.

Let’s look at a specific situation*

John wants to buy a new home for $400,000. She’s saved the minimum required down payment of $20,000 (5% of the purchase price). Under the First-Time Home Buyer Incentive, John can apply to receive $40,000 in a shared equity mortgage (10% of the cost of a new home) through the program.

This lowers the amount John needs to borrow and reduces the monthly expenses.

As a result, John’s mortgage is $228 less a month or $2,736 a year.

Ten years later, John sells her home for $420,000. The Incentive will need to be repaid as a percentage of the home’s current value. This would result in John repaying 10%, or $42,000 at the time of selling the house.

For more information, see First-Time Home Buyer Incentive

CALL GREG

905-924-1512