Canada's First Time Homebuyer Incentive Program
Rita Cousins Senior Mortgage Advisor • October 11, 2019
The new First-Time Home Buyer Incentive allows eligible first-time homebuyers, who have the minimum downpayment for an insured mortgage, to apply to finance a portion of their home purchase through a form of shared equity mortgage with the Government of Canada
HOW IT WORKS:
- Lower Monthly Mortgage Payments
- Interest-free Incentive Program
- No Pre-payment Penalty
- Newly Constructed Homes eligible for 5% or 10%
- Existing Homes eligible for 5%
How do I know if I qualify for this incentive?
At least one homeowner must be a first-time homebuyer,
which is considered as the following:
- You have never purchased a home before
- You have gone through a breakdown of marriage or common-law partnership (even if the other first-time home buyer requirements are not met)
- In the last 4 years you did not occupy a home that was occupied by the homebuyer or their spouse
How does my income affect qualifying for this incentive?
Your total qualifying income must be $120,000 per year or less. Remember you will still need to qualify the income requirements set out by lenders and mortgage loan insurers.
Do I still need Mortgage Loan Insurance?
Mortgages must be eligible for mortgage loan insurance through either Canada Guaranty, CMHC or Genworth. The first mortgage must be greater than 80% of the value of the property and is subject to a mortgage loan insurance premium.
The 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. The Incentive amount is included with the total down payment.
Do I have to pay the government back?
The first-time homebuyer will be required to repay the Incentive amount after 25 years or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full at any time, without a pre-payment penalty. Refinancing of the first mortgage will not trigger repayment.
How is repayment calculated?
Repayment is based on the property’s fair market value at the point in time where repayment is required. If you receive the 5% Incentive, you will pay 5% of the home’s current market value. If you received 10%, you will pay 10% of the home’s current market value.
Does this affect the type of property I can purchase?
Yes, there are some guidelines for the type of property, and the intention of ownership. Eligible residential properties include:
- New construction
- Re-sale home
- New and re-sale mobile/manufactured homes
Types of residential properties include:
- Single family homes
- Semi-detached homes
- Duplex
- Triplex
- Fourplex
- Town houses
- Condominium units
Depending on the eligible property type, the Government of Canada will offer 5% for a first-time buyer’s purchase of a resale home, and 5% or 10% for a first-time buyer’s purchase of a new construction. The property must be located in Canada and must be suitable and available for full-time, year-round occupancy. Additionally, you can NOT purchase the home with the intention of renting, as investment properties are not eligible.
Without this new incentive, if you only have 5% down payment, your mortgage would be 95% of the purchase price plus the mandatory default insurance premium. Default insurance premiums are larger when you have a smaller down payment. With the new incentive, you now have up to 15% down payment (5% your own and 10% incentive) so your mortgage size is smaller and the insurance premium is also lower because the down payment is higher.
SURREY, BC – Decade-high inventory and softer prices failed to spark buyer demand in the Fraser Valley in 2025. Despite favourable conditions and increased negotiating power, many buyers stayed on the sidelines, making it one of the slowest years for sales in decades. The Fraser Valley Real Estate Board recorded 12,224 sales on its Multiple Listing Service® (MLS®) in 2025, a decline of 16 per cent over 2024 and 33 per cent below the 10-year average. The City of Surrey accounted for the majority of 2025 sales at 48 per cent, with Langley and Abbotsford accounting for 24 per cent and 16 per cent respectively. On the supply side, buyers had more choice than at any point in the past four decades, as new listings climbed to 37,963. The composite Benchmark home price in the Fraser Valley closed the year at $905,900, down six per cent year-over-year, and down 24 per cent from the peak in March 2022.
The number of court-ordered sales in Metro Vancouver is jumping, and may continue to grow as a mortgage renewal wave hits Canada five years after the pandemic-era real estate frenzy. Court-ordered inventory, while less than one per cent of the market, totalled 119 properties in the Vancouver region in October 2025, compared with 66 in October 2024 and 28 in October 2023, according to real estate website Zealty.ca (Zealty Online Search Inc.). Foreclosures are becoming more frequent because home prices are correcting, unemployment is rising and people who bought during the pandemic are having to renew their mortgages at higher interest rates, said Adam Major, managing broker with Sechelt-based Holywell Properties. There was a massive increase in home sales from late 2020 through 2022, he said. “This was the height of COVID craziness when [Bank of Canada governor] Tiff Macklem promised rates would stay low forever, the government was sending everyone free money and we all wanted a bigger house to work from home in,” he said. Those homes were financed at rock-bottom interest rates, with the central bank’s policy rate sitting at 0.25 per cent from March 2020 to March 2022. Because Canadian banks generally offer maximum terms of five years, it’s now time for many to pay the piper—at interest rates higher than what some can afford. “It is definitely a bad sign for the market as we are only at the beginning of the big mortgage renewal wave,” Major said. The most sales ever in a month in the region were the 5,715 sales in March 2021, he said. “Those buyers will have to renew this coming March. The number of renewals will stay elevated for a year after that. The average discount mortgage rate in March 2021 was 1.69 per cent versus about 3.79 per cent now, so almost everyone who bought in 2021 and 2022 will be paying significantly more on renewal,” he said. 👉 Read the Article Here
In this episode of Andy Talks Real Estate, I break down the November Fraser Valley real estate market and explain what the numbers actually mean if you’re thinking about buying or selling a home. This market has slowed as we head into the holiday season. Inventory is contracting. Sales are down. Prices have softened after several months of gradual decline. And that shift is creating very different opportunities depending on which side of the market you’re on. For Buyers: Buyers are firmly in control right now. You have more choice, more time, and the ability to negotiate properly. Conditions are back Home inspections matter Financing protection matters Time to make informed decisions Based on what I’m seeing, this buyer-friendly environment is likely to carry into early 2026. For Sellers This is not a market where you can rely on last year’s pricing or momentum. Accurate pricing is critical Professional preparation matters Strong marketing makes the difference Strategy beats waiting Homes that are positioned correctly are selling. Homes that miss the mark are sitting. Market Context The data comes directly from the Fraser Valley Real Estate Board, including: Sales activity New listings Months of inventory Housing Price Index trends Langley-specific market shifts The market feels more like a buyer’s market than a balanced one when you’re out touring homes. Looking Ahead There are early signs of pent-up demand, particularly among buyers with insured mortgage pre-approvals. January and February may stay quieter Activity is likely to build into late winter and spring Preparation is the advantage Have a plan. Know your options. Move when the timing is right for you.
