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  • Writer's pictureDave Fullerton

Affordable Homeownership: The First-Time Homebuyer Incentive

Are you a first-time homebuyer in Canada? Have you heard of the First-Time Homebuyer Incentive program? This shared-equity mortgage, brought to you by the Canadian government, is designed to help you reduce those daunting monthly mortgage payments and make your dream of owning a home a reality.

The Power of the First-Time Homebuyer Incentive

So, what exactly does this incentive offer you?

With the First-Time Homebuyer Incentive program, you can receive a government incentive to assist with your down payment working as a shared equity instrument. It works by getting an extra 5% or 10% of the down payment on your home and then repaying the Government 5% or 10% of the property’s market value at the time of repayment. This means your overall mortgage amount decreases, and as a result, your monthly mortgage costs become much more affordable.

Exploring the Options: Your Incentive Possibilities

Regarding the program, there are exciting possibilities for you to explore based on your preferences. We’ve listed a few below:

  • 5% or 10% for a first-time buyer’s purchase of a newly constructed home.

  • 5% for a first-time buyer’s purchase of a resell of an existing home.

  • 5% for a first-time buyer’s purchase of a new or a resell of a mobile/manufactured home.

Qualifying for the First-Time Homebuyer Incentive

Now, let's talk about how to qualify for this incredible program. It’s specifically designed to assist first-time homebuyers like yourself. To be eligible, you need to meet the following criteria:

  • First-Time Homeowner Status: You, or your partner, have never purchased a home before, you did not occupy a home that you or a common-law have owned in the past four years, or you have recently experienced a breakdown of a marriage.

  • Income Threshold: Your total qualifying income is no more than $120,000 ($150,000 for homes in Toronto, Vancouver, or Victoria).

  • Borrowing Limit: Your total borrowing is less than four times your qualifying income (four and a half times your income if you purchase in Toronto, Vancouver or Victoria).

  • Residency Status: You are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada.

  • Down Payment: You meet the minimum down payment requirements.

Exploring Additional Costs

While the incentive program opens doors to affordable homeownership, it's essential to be aware of additional costs. Alongside the incentive, you may encounter a few extra expenses, including additional legal fees, appraisal fees to determine your home's repayment value, and potential fees related to refinancing or switching mortgages if you decide to move or update your mortgage.

Repayment Made Easy

Regarding repaying the incentive, the process is designed to be straightforward and flexible. You must pay back the incentive after 25 years or when you sell the property, whichever comes first. However, you can also choose to repay the incentive at any time without any penalties. The repayment amount is based on the fair market value of your home at the time of repayment, ensuring fairness and transparency.

Bottom Line

Remember, life is full of surprises, and circumstances may change. For instance, you'll need to repay the incentive sooner if you choose to port your mortgage or go through a separation during the term and want to buy out your co-borrower. So, it's essential to stay informed and plan accordingly.

Ready to embark on your exciting homebuying journey? Click here to learn more about the First-Time Homebuyer Incentive, and contact us today! Don't miss out on this fantastic opportunity to turn your dream of homeownership into a reality.


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