The First-Time Home Buyer Incentive helps people across Canada purchase their first home. The program offers 5 or 10% of the home’s purchase price to put toward a down payment. This addition to your down payment lowers your mortgage carrying costs, making home ownership more affordable.
AM I ELIGIBLE FOR THE INCENTIVE?
These are a few criteria to determine your eligibility for the First-Time Home Buyer Incentive:
- your total annual qualifying income doesn’t exceed $120,000 ($150,000 if the home you are purchasing is in Toronto, Vancouver, or Victoria)
- your total borrowing is no more than 4 times your qualifying income (4.5 times if the home you are purchasing is in Toronto, Vancouver or Victoria )
- you or your partner are a first-time homebuyer
- you are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada
- you meet the minimum down payment requirements with traditional funds (savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member)
The Incentive is like a second mortgage on your home. Your first mortgage must be greater than 80% of the value of the property and is subject to a mortgage loan insurance premium. It also must be eligible through Canada Guaranty, CMHC or Sagen.
The insurance 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. You don’t pay mortgage insurance on the incentive – it is included with the total down payment.
The type of home you plan to purchase plays a factor. The table indicates the type of home that qualifies for the incentive and how much of an incentive it may be eligible to receive.
| PROPERTY TYPE | INCENTIVE AMOUNT(%) |
|---|---|
| New Construction | 5% or 10% |
| Existing Home | 5% |
| New and existing mobile/manufactured home | 5% |
Residential properties can have 1 to 4 units and include:
- single family homes
- semi-detached homes
- duplex
- triplex
- fourplex
- town houses
- condominium units
- mobile homes
The bottom line: Your property must be located in Canada and must be suitable and available for full-time, year-round occupancy. Your home is for you to live in and can’t be used as an investment property.
Other details you need to know
The Incentive may be associated with additional costs:
- Additional legal fees: Your lawyer is closing 2 mortgages so you may be charged higher fees.
- Appraisal fees: To repay your incentive, you may need to have an appraisal done to determine the fair market value of your home.
- Other fees: Additional fees may be incurred throughout the life cycle of the incentive, like switching your first mortgage to a new lender or refinancing your first mortgage.
- Property Insurance premiums: Additional costs may be incurred to account for an additional mortgage registered on the property. Talk to your insurance broker or insurance provider to find out more details.
Repayment Details
The Incentive must be paid in full – that is no partial payment – after 25 years or when the home is sold. There are a few ways where changes to the Incentive can trigger repayment:
- 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.
Borrowers should discuss with their lender if repayment of the incentive is required under certain refinancing situations.
HOW DO I APPLY FOR THE INCENTIVE?
Once you’ve been pre-approved for a mortgage, found the home you’re looking for and determined you’re eligible to apply for the incentive, it’s time to apply. Simply fill out these 2 application forms to apply for the First-Time Home Buyer Incentive:
FTHBI – SEM Information Package (PDF)
SEM Attestation and Consent Form (PDF)
Once complete, give these to your lender. They will submit the application for you.
Give the final signed copy of the shared equity mortgage package to your solicitor to retain on your behalf.
When you receive your acceptance, call FNF Canada at 1-(855) 844-4535 to activate your incentive and provide the name of your lawyer/notary. (This must be at least 2 weeks prior to your closing date.)
HOW DO I REPAY THE INCENTIVE?
Repayment Details
The Incentive must be paid in full – that is no partial payment – after 25 years or when the home is sold. There are a few ways where changes to the Incentive can trigger repayment:
- 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.
Use these informational pieces to understand more about the incentive.
- Repayment Document (PDF): A step-by-step process along with key information.
- Appraisal Document (PDF): Appraisal checklist to be provided to the appraiser in the case of a voluntary repayment or at the 25-year mark.
- Operational Policy Manual (PDF)
- Questions & Answers (PDF)
Borrowers should discuss with their lender if repayment of the incentive is required under certain refinancing situations.
HOW DO I KNOW IF MY HOME IS IN THE TORONTO, VICTORIA, OR VANCOUVER CENSUS METROPOLITAN AREA?
New Toronto, Vancouver, Victoria criteria.
Please use any of the following Statistics Canada tools to determine if your home falls into the Toronto, Victoria or Vancouver CMA’s:
Note: All First time home buyer questions should be directed to the program administrator at fthbi@cmhc-schl.gc.ca
Statistical Area Classification List and Census Subdivisions
Statistical Area Maps (Interactive)
Statistical Area Maps (PDF)
Postal Code Search (Please note that this tool is for Employment Insurance Economic regions, which are the same as the CMA for Toronto, Vancouver and Victoria. Confirmation of the location of the property will come from the Program Administrator).