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
Residential properties can include 1 to 4 units.
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.
