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How the First Time Buyer Program Works

First Time Buyers Government Programs - Down Payment Incentive

First Time Home Buyers Program

First Time Home Buyers Incentive - Introduced in September 2019

Great News for First Time Buyers.   More government incentives that can help bring homeownership dreams to reality.

One program available to home buyers is the C.M.H.C. First-Time Buyer Down Payment Incentive.  Up to 1.25 billion dollars has been set aside to help lower mortgage costs for eligible Canadians, on a First Come First Service Basis. 

The First Time Home Buyer Incentive helps qualified first time buyers reduce their monthly mortgage carrying costs without adding to their financial burdens.

Buyers will need to have a minimum down payment to be eligible, which can be from your qualified R.S.P.  Just keep in mind this is a C.M.H.C. insured mortgage program. The total down payment is to be “less” than 20% down.

You can then apply for the 5% Down Payment Incentive, giving you an extra 5% down on resale purchases or 10% on new construction.  Simplified, this is a shared equity mortgage program with the Government of Canada. 

Property Type Incentive (%)
New Construction Home or Condo 10%
Existing Resale Home or Condo 5%
New or Resale Mobile / Manufactured Home 5%

The Incentive funds will be a second mortgage on title.  There will be no regular principal payments, no interest and has a maximum repayment term of 25 years or sooner if the property is sold.

You can repay the Incentive at any time without a pre-payment penalty.  However, the repayment is based on the property’s fair market value.

Example Scenario of Repayment of Government Incentive
An example, you receive a 5% incentive of a resale home that you purchase for $480,000, and you receive a $24,000 incentive, then perhaps your home value increases to $600,000 your payback would be 5% for the current value which would be $30,000.

The Government will share in the upside and downside of the property value upon repayment.   Essentially the government is re-paid by their shared equity from the value of the property.

Who qualifies for the First Time Buyers Down Payment Incentive?   Canadian Citizens, permanent residents, non-permanent residents who are legally authorized to work in Canada, but call review the qualifying details below.   The Buyers maximum annual house hold income should be no more than $120,000 and the total borrowing is limited to 4 times the qualifying income. 

Example of Income to Property Value Qualifying
A simple example would be if your combined income is $120,000 x 4 the maximum purchase price would be $480,000 plus your 5% down payment and the 5% Incentive Down bringing it up to $528,000.
Higher Price if working with 10% down incentives bringing it to over $570,000


How Out Find Out If You Qualify:

Your Sutton Realty agent will have a list of resale and new construction developments in your selected area. 

Call us today for more details on this and other Government Programs available to help you with Home Ownership.   Funds are limited, and timing is important, so please ensure to get all the details for a well-planned home purchase.

Happy House Hunting from your Sutton Realtor.    905-896-3333    416-762-4200


More Details on the First Time Buyer Incentive

First Time Home Buyer Incentive Program Details.   Down load more information today or call us with your questions.  416-896-3333

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Check out our other helpful Links:

Just Listed Properties featured on our blog.

Ontario Land Transfer Tax Information for Home Buyers - easy to use Land Transfer Tax Calculators

Free Tips for Home Buyer Report - including closing costs you should be aware of when you purchase a home.


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