First-Time Home Buyers Incentive

Hello Friends! Now that September is here and the mornings and nights are getting cooler, it is time to get back into routine! With that being said, the official date of Fall is just around the corner and it is one of the best times to buy a home for several reasons. Today I am going to dive into one HUGE reason you, a first-time home buyer, should consider buying a home.

In case you missed it, The Federal Government released a First-Time Home Buyers Incentive plan to help qualified first-time home buyers reduce their monthly mortgage carrying costs without adding to their financial burdens. A.K.A., to help first time home buyers get into a home. Canadian Mortgage and Housing Corporation (CMHC) has started accepting applications for this incentive on September 2nd.


In a nutshell, this is what the First-Time Home Buyer Incentive means for you:

The Incentive enables first-time home buyers to get their foot in the door of their first home and reduces their monthly mortgage payments without increasing their down payment. The Incentive is also not interest bearing and does not require ongoing repayments.

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

5% for a first-time buyer’s purchase of a re-sale home

5% or 10% for a first-time buyer’s purchase of a new construction 

A couple of things you do need to know before you apply are:

·  you need to have the minimum down payment to be eligible 

· your maximum qualifying income is no more than $120,000

·  your total borrowing is limited to 4 times the qualifying income 

So, if you meet the criteria, you can then apply for a 5% or 10% shared equity mortgage with the Government of Canada. A shared equity mortgage is where the government shares in the upside and downside of the property value. 

What are the terms of repayment? 

The first-time home buyer will be required to repay the Incentive amount after 25 years or when the property is sold, whichever comes first. 

The home buyer can also repay the Incentive in full at any time, without a pre-payment penalty. Refinancing of the first mortgage will not trigger repayment.


How is repayment calculated?

·  If a home buyer receives a 5% or 10% Incentive, the home buyer will repay 5% or 10% of the home’s value at repayment. 

·  Repayment is based on the property’s fair market value.

Overall, this is a huge opportunity for first-time home buyers if executed right. If you have any questions at all please feel free to reach out to me, I can walk you through the ins and outs of this Incentive and also connect you with a great mortgage broker, Josh Findlay, who will be able to look at your numbers for you.

I am always a phone call, text message or email away friends!

Have a great weekend and enjoy that crisp fall air.

Erika Colwell