The First-Time Home Buyer Incentive launches September 2, 2019

Barring any unforeseen circumstances the program will launch on September 2, 2019.

The first closing will take effect on November 1, 2019.

The First-Time Home Buyer Incentive (the Incentive) helps qualified first-time

homebuyers reduce their monthly mortgage carrying costs without adding to their financial burdens.

You need to have the minimum down payment to be eligible. You can then

apply for a 5% or 10% shared equity mortgage with the Government of Canada.

Your maximum qualifying income is no more than $120,000 and

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

A shared equity mortgage is where the government shares in the upside

and downside of the property value.

How does it work?

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:

How do I know how much I have to pay back?

NOTE: If your property value goes down, you are still responsible for repaying the shared equity mortgage based on the current home value at time of repayment.

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

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. Purchase transactions already closed prior to September 2, 2019 cannot be considered under the program. More details on how to apply will be shared once it is available.

Eligibility & Requirements

Anita wants to buy a new home for $400,000.

Under the First-Time Home Buyer Incentive, Anita can apply to receive $40,000 in a shared equity mortgage (10% of the cost of a new home) through the program. This is on top of the minimum required down payment of $20,000 (5% of the purchase price) from her savings.

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

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

* These examples are for illustrative purposes only. Anita/John will need to repay the incentive at 10% of the fair market value when they sell the property or after 25 years, whichever is earliest. All property values and home prices used in this example are not an indicator on how property values are forecasted.