The First -Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage carrying costs without adding to their financial burdens. 

1. How to qualify**:

   • You need to have the minimum down payment (5%) from your own funds (your savings or gifts received) to be eligible to apply to

     get the government’s incentive • Your maximum qualifying income is no more than $120,000

   • Your total borrowing is limited to 4 times the qualifying income (up to $480,000)

   • At least one borrower must be a first-time homebuyer (definitions of government website)

   • Canadian citizens, permanent residents, and non-permanent residents who are legally authorized to work in Canada


2. If you meet these 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.)


3. When does it start:

   • The First-Time Home Buyer Incentive will be ready to receive Incentive applications on September 2, 2019 (barring any unforeseen

     circumstances). The first closing will take effect on deals closing on or after November 1, 2019. 

4. How much can I borrow: 

     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


5. How and how much do I have to pay back?

   • No interest

   • No monthly payment

   • If you borrow 5% you pay back 5% of the value of the property at the time you sell or after 25 years, whichever comes first.

   • If you borrow 10% you pay back 10% of the value of the property at the time you sell or after 25 years, whichever comes first.


6. Bottom Line:

  • If your property value increases, the government makes money on your property with you
  • If your property value decreases, the government loses money on your property with you

7. Examples:

   • Ana is buying a $400,000 brand new home

     o She gives $20,000 (5%) as a down payment from her owns saved money

     o She uses the First-Time Home Buyer Incentive to borrow $40,000 (10%) interest and payment free from the government

     o She only needs a mortgage for $340,000

     o Later she sells the property for $420,000, therefore she needs to repay the government $42,000 (10%).

   • John has an annual qualifying income of $83,125.

     o To be eligible for Canada’s First-Time Home Buyer Incentive, John can purchase condominium unit up to $350,000

     o John has the required minimum down payment of 5% of the purchase price, $17,500 from savings.

     o John can receive $35,000 in a shared equity mortgage – 10% of a newly constructed home.

     o He only needs a mortgage for $297,500

     o Later he sells the property for $320,000, therefore he needs to repay the government $32,000 (10%).


** Eligibility & Requirements Who can apply?

   • Canadian citizens, permanent residents, and non-permanent residents who are legally authorized to work in Canada

   • Borrowers must have a maximum qualifying income of $120,000

       o Total qualifying income must be $120,000 per year or less

       o This is subject to qualifying income requirements set out by lenders and mortgage loan insurers

   • At least one borrower must be a first-time homebuyer, as per the definition below.


Are you a first-time homebuyer? 


You are considered a first-time homebuyer if you meet one of the following qualifications:

   • you have never purchased a home before

   • you have gone through a breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time home

     buyer requirements).

   • in the last 4 years, you did not occupy a home that you or your current spouse or common-law partner owned 


IMPORTANT: It’s possible that you or your spouse or common-law partner qualifies for the First-Time Home Buyer Incentive

(if you are in a married or common-law relationship) with the 4-year clause even if you’ve owned a home.


How does the 4-year period work?


The 4-year period begins on January 1 of the fourth year before the year you purchased your home. It ends 31 days before the date you purchase your new home. Here are a few examples:

   • if you purchase a home on March 31, 2016, the 4-year period begins on January 1, 2016 and ends on February 28, 2020

   • if you sold your home you lived in in 2014, you may be able to participate in 2019 or if you sold the home in 2015, you may be able

     to participate in 2020


Are there other mortgage details?


   • Total borrowing is limited to 4 times the qualifying income. The combined mortgage and Incentive amount cannot exceed four times

     the total qualifying income. The amount for the mortgage loan insurance premium is excluded from this calculation.

   • The maximum threshold for debt service ratios are GDS 39% and TDS 44%. This is only applied on the first mortgage and is subject

     to requirements by lenders and mortgage loan insurers.

   • The Incentive is a second mortgage on the title of the property. There are no regular principal payments. It isn’t interest bearing and

     has a maximum term of 25 years.

   • The Government of Canada will share in the upside and downside of the property value upon repayment. Is Mortgage Loan

     Insurance required?

   • Mortgages must be eligible for mortgage loan insurance through either Canada Guaranty, CMHC or Genworth. The first mortgage

     must be greater than 80% of the value of the property and is subject to a mortgage loan insurance premium.

   • The premium is based on the loan-to-value ratio of the first mortgage only. That is, the first mortgage amount divided by the

     purchase price. The Incentive amount is included with the total down payment.

   • Mortgage loan insurance premiums may be subject to provincial taxes. What are the down payment requirements?

   • Minimum down payment is 5% of the first $500,000 of the lending value and 10% of the lending value above $500,000.

   • The minimum down payment must come from traditional down payment sources.

   • Traditional down payment comes from the borrower’s own resources and may include:

        o savings

        o withdrawal/collapse of a registered retirement savings plan (RRSP)

        o non-repayable financial gift from a relative 


   • Note: Unsecured personal loans or unsecured lines of credit used to satisfy minimum down payment requirements are not

     eligible for the program.


What properties are eligible?


The Incentive is to help first-time homebuyers purchase their first home. Eligible residential properties include:

   • new construction

   • re-sale home

   • new and re-sale mobile/manufactured homes


Residential properties can include 1 to 4 units.


Types of residential properties include:

   • single family homes

   • semi-detached homes

   • duplex

   • triplex

   • fourplex

   • town houses

   • condominium units


IMPORTANT: The property must be located in Canada and must be suitable and available for full-time, year-round occupancy.


What are the terms of repayment?


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

comes first.


The homebuyer 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 homebuyer receives a 5% or 10% Incentive, the homebuyer will repay 5% or 10% of the home’s value at repayment.

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

The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.