5 or 10% of the home’s purchase price to put towards a down payment which can help lower your mortgage carrying costs and make home ownership more accessible. Below, we’ll explore a few key points of the incentive including who is eligible, how to apply and more. Read on to learn more! What Is The Incentive? As mentioned above, the objective of the First-Time Home Buyer Incentive is to make it easier for Canadians to buy a new home and lower your monthly mortgage payments. The program is a shared equity mortgage that allows you to borrow 5 or 10% of the purchase price. Homeowners then pay back the same percentage of the value of your home when you sell it, or within a 25-year window (whichever happens first). For example: If you receive a 5% incentive on the purchase price of $200,000 ($10,000) and your home’s value increases to $300,000, your payback would be 5% of the current value ($15,000). As the name implies, the incentive is for first-time home buyers, which refers to those who:
- Have not purchased a home before.
- Did not occupy a home that you or your current spouse/common-law partner owned in the last 4 years
- Have recently experienced the breakdown of a marriage or common-law relationship.
- You have your minimum down payment
- Your total annual qualifying income is less than $120,000
- Your total borrowing is no more than 4 times your qualifying income.
- You or your partner are a first time home buyer
- You are a Canadian citizen, Permanent Resident, or a non-permanent resident authorized to work in Canada.
- Single family homes
- Semi-detached homes
- Duplex
- Triplex
- Fourplex
- Town houses
- Condominium units
- Mobile homes
- You go through a break up and you want to buy out the co-borrower. If this requires additional insured funds, you must pay back the Incentive in full.
- Porting your mortgage will trigger a repayment of the Incentive.
- A partial release of security is considered a sale and will trigger repayment of the Incentive.
- A change in the intended use of the property.