Canadian First Time Home Buyer Incentive 2019

Thursday Sep 26th, 2019


Canadian First Time Home Buyer Incentive 2019

I've been getting a ton of calls regarding the new first time buyer incentive put out by the Federal Government this September.  I've gone ahead and put together a list of key points regarding this product and quick video explaing everything you need to know.  If you have any addtional questions regarding this topic or anything real estate related, please fill out the contact form at the bottom of the page. Cheers!

What is it?

The government will loan buyers 5% of the purchase price for a re-sale home, or 10% for a new one. That works out to a possible $50,000 on a new $500,000 home, or $25,000 on a $500,000 resale property. That could save you a little bit on your mortgage payment and monthly insurance premium—somewhere around $100 to $300 per month, according the federal government’s calculations

Buyers don’t have to make ongoing payments and are not charged interest on the loan. But they do have to repay the incentive, either when they sell the house, or after 25 years—whichever comes sooner. 


Do you Qualify? 

  1. Your qualifying household income is less than $120,000. Qualifying income includes money you earn from investments and rental income, not just your job(s). 
  2. You have at least the minimum down payment. The minimum down payment is 5% of the first $500,000 of the home’s purchase price, and 10% for any amount above that. However, the total amount you put down (including the FTHBI amount) must be less than 20% of the home’s purchase price. This maximum down-payment rule also assures that the FTHBI applies only to CHMC mortgage-default-insured mortgages.
  3. You are borrowing less than four times your qualifying income. Since the maximum qualifying income is $120,000, the most any eligible buyer can borrow (and still be able to apply for the Incentive) is $480,000 — including the mortgage, mortgage insurance and the FTHBI amount. Lower earners who want to apply for the Incentive are limited to borrowing even less, which would be challenging considering that the average price of a home in Canada in June 2019 was $505,463, according to Canadian Real Estate Association data.

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