First-Time Home Buyer Incentive

Updated June 1, 2022

Your first home is exciting, yet intimidating.

Are you tired of renting? Or want your own space, your way? There's a lot to think about and plan for if you're in the market for your first home, starting with getting together enough down payment to make your mortgage a reality.

But there may be help out there for you, starting with this government program.

What is the First-Time Home Buyer Incentive?

Launched in September of 2019 through the federal government's Canada Mortgage and Housing Corporation (CMHC), this program offers access to an interest-free loan, to help first-time home buyers get into their first real estate investment. They'll top up your down payment by 5% on most homes or 10% on new builds — for a shared-equity mortgage.

How it helps you:

The larger down payment lowers your monthly payments, thereby lowering your overall mortgage costs. There is no interest or regular payments for the top-up, and it may be repaid at any time without pre-payment penalties.

How do you pay it back?

The loan isn’t due for 25 years, or until you sell the house (whichever comes first). When repaying the loan, the current value of the house is calculated (for both 5% or 10%), meaning the buyer is partially protected if the market drops.

Update June 1, 2022. As mentioned in the 2022 Federal Budget points, the Government of Canada is now limiting its share in the appreciation of your home to a maximum gain of 8% per annum on the incentive amount (not compounded). That means when you repay, you'll keep more of the home's equity if it has increased in value.

If your home has decreased in value (depreciated) at the time of repayment, then the government's share of the loss is also limited to a maximum of 8% per annum on the incentive amount (not compounded).

Note: This FTHBI recalculation is retroactive to September 2, 2019, when the program was first introduced. Read more here about being contacted by a CMHC rep if you're in line for a reimbursement.

Who is this first-time incentive for?

• First-time home buyers, as outlined by the program requirements
• Household incomes must be less than $120K (increases to less than $150K if you live in Toronto, Vancouver or Victoria)
• Your original down payment must be at least 5%, but not more than 20%
• Your mortgage must be eligible for mortgage insurance (applies to your original down payment, not the incentive portion)

How much house can I afford?

Depending on where you live, the maximum purchase price with this program is typically 4x your annual household income (to a max of $120K). So, the theoretical maximum mortgage under this program is currently $480K. Keep in mind that you may qualify for more without the program. Usually, that maximum is 6x your annual household income. Check out our Affordability Calculator for a quick idea of your numbers.

Eligibility has been expanded for Toronto, Vancouver and Victoria areas.

The Government of Canada has acknowledged that in markets like Toronto, Vancouver and Victoria, the original program is not viable with current housing prices.

• For these areas, the ceiling amount for the maximum household annual income has been raised to $150K
• The maximum purchase price is 4.5x your annual household income (to a max of $150K)
• House purchased must be within the Census Metropolitan Areas for these cities, as outlined by the program

We can help you apply — and offer great advice on other programs.

We're experts, and we know the ins and outs of your very first mortgage. There are several required documents for this program — we can walk you through AND them submit on your behalf. There's no cost to you, and no obligation. Plus, there are other rebates and programs, such as the Home Buyers Plan, that may also help out.

It's important to start with your best rate and mortgage product, regardless of available programs. We check (and haggle) with all the lenders on your behalf, so that you can sleep easier knowing that you didn't miss out on a better option.

Talk to us today, or apply online now. We make it all so easy.

A comparison, with the maximum allowed

10% (new build) incentive on $533,329 purchase means you could save $268/mo or $3,221 annually.

A comparison, based on the average Canadian household income (age group 25-34)

5% (existing home) incentive on $322,080 purchase means you could save $86/mo or $1,029 annually.