The First-Time Home Buyer Incentive is a program by the Canadian Government to help first time home buyers get into the market with an interest-free loan. They will top up your down payment by 5% on most homes, or 10%, on new builds. The loan isn’t due until you sell the house, or after 25 years.
The larger downpayment results in lower overall mortgage costs by lowering monthly payments. There is no interest or regular payments, and it may be repaid without pre-payment penalties at any time. When repaying the loan, the value is calculated on the value of the house at that time (5% or 10%), meaning the buyer is partially protected if the market drops.
The maximum purchase price with this program is 4x your annual household income (to a max of $120K). The theoretical maximum mortgage under this program is currently $480,000. Keep in mind; you may qualify for more without the program. Usually, the maximum is 6x your annual household income.
The Government of Canada has acknowledged that in markets like Vancouver & Toronto, the program is not viable with current housing prices. They have pledged to increase the cap $750,000 in specific markets, but details have not been announced as of 09/17/19.
Contact True North Mortgage to take advantage of fantastic opportunity. There are several required documents that we can help walk you through and submit on your behalf.
You can calculate your personal savings at PlaceToCallHome.ca/FTHBI
10% (new build) incentive on $533,329 purchase you could save $268/mo or $3,221 Annually.
Without incentive | With incentive | |
---|---|---|
Down Payment | $53,329 | $53,329 |
First Time Home Buyer Incentive | $0 | $53,330 |
Mortgage Amount | $479,970 | $426,640 |
Mortgage Insurance | $19,199 | $11,946 |
Total Mortgage Amount | $499,169 | $438,586 |
Monthly Mortgage Payment (2.39%) | $2,212 | $1,943 |
5% (existing home) incentive on $322,080 purchase you could save $86/mo or $1,029 Annually.
Without incentive | With incentive | |
---|---|---|
Down Payment | $16,104 | $16,104 |
First Time Home Buyer Incentive | $0 | $16,104 |
Mortgage Amount | $305,976 | $289,872 |
Mortgage Insurance | $12,239 | $8,986 |
Total Mortgage Amount | $318,215 | $298,858 |
Monthly Mortgage Payment (2.39%) | $1,410 | $1,324 |