First-Time Home Buyer Incentive Program Calculator

The First-Time Home Buyer Incentive Program is designed to help people buying their first home get on the property ladder and reduce their monthly mortgage payments. Use our FREE first-time home buyer inventive program calculator to determine your payments today!

Buying your first home can be stressful – not only is everything brand-new and/or unknown, but you’re also starting on the property ladder completely from scratch. There are a lot of ins and outs in the home buying process, and that includes the multitude of programs to help Canadian homebuyers. One of those programs is the First-Time Home Buyer Incentive Program, specifically designed for those just starting their home ownership journey.

First Time Home Buyer Incentive Program Calculator

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You could qualify for...

Shared-Equity Incentive
44
Home Buyer's Plan (RRSP)
upto $35,000

What Is The First-Time Home Buyer Incentive Program?

In short, the First-Time Home Buyer Incentive Program is designed to help people buying their first home get on the property ladder and reduce their monthly mortgage payments. This is done via an equity share with the Government of Canada, whereby the government will offer you either:

  • 5-10% towards the purchase or down payment on a newly-constructed home
  • 5% towards the purchase or down payment on a resale home, or
  • 5% towards the purchase or down payment on a new or resale manufactured/mobile home

How Does This Affect Your Down Payment and Mortgage?

Taking advantage of this incentive means you’ll have to save less for a down payment, which can save you money on mortgage payments in the long term. For example, if you’re able to put down a 20% down payment on a home, you won’t have to pay for mortgage default insurance which will greatly reduce your mortgage payment each month. Using the First-Time Home Buyer Incentive Program, you could save up to 10% yourself and take the other 10% from the government, allowing you to buy your home a lot sooner, and reduce your monthly mortgage payments.

 

Here’s an example done for a new-build home, with an interest rate of 2.45% and a 25-year amortization period:

Basic Program only Program and RRSPs
Price $400,000 $400,000 $400,000
Down Payment (buyer) $20,000 (5%) $40,000 (10%) $20,000 (5%)
Down Payment (program) N/A $40,000 (10%) $40,000 (10%)
Additional N/A N/A $35,000
Mortgage Amount $380,000 $320,000 $305,000
Monthly Mortgage Payment $1,695 $1,428 $1,361

How Does Repayment Work?

Now, because it’s an equity share, you will eventually have to pay this money back to the government. Repayment is due either a) after 25 years or b) when you sell the house, whichever comes first. You’ll be expected to pay back the same percentage of the value of the home that you borrowed, so if you borrowed 10% under the First-Time Home Buyer Incentive Program, you’ll pay the government back 10% of the market value of the home at the time of repayment, up to a maximum of 8% gain or loss per year.

Eligibility and Requirements

There are some key things to keep in mind with this program, so let’s take a look at them.

 

At least one person on the documentation must be a first-time home buyer. That means one of three things:

 

  1. they’ve never purchased a home before or
  2. has not lived in a home that either they or their married/common-law partner has owned in the last four years or
  3. they’ve gone through a breakdown of a marriage/common-law partnership (this applies even if the other first time requirements are NOT met)

 

It’s important to know that you or your partner can qualify for this incentive even if you’ve owned a home before; it all depends on the timeline.

 

You can’t use this program towards an investment property – it’s for occupancy only – and the property must be located within Canada! Eligible persons include Canadian citizens, permanent residents, and non-permanent residents who are legally authorized to work in Canada.

 

There are also income requirements and thresholds to take into account. These depend on the housing market value and are generally set by lenders, financial institutions, and mortgage loan insurers. There are minimum down payment requirements and limitations on the types of down payments you can use. For example: trying to make a larger down payment using an unsecured loan or line of credit is NOT eligible for this program.

 

To apply for this program you’ll also have to complete the following requirements:

 

  • A signed privacy agreement
  • A credit application
  • A signed copy of the FTHBI Program Attestation, Consent and Privacy Notice at the time of application, available on FTHBI website
  • Only High Ratio mortgages (greater than 80% Loan-to-Value) are eligible
  • Borrower’s annual qualifying household income does not exceed $120,000

How To Use This First-Time Home Buyer Incentive Program Calculator

If you’re a first-time home buyer looking for a way to save money on your purchase, the First-Time Home Buyer Incentive Program Calculator is here to help. This calculator can help you determine if the program is right for you and how much of the purchase or down payment amount you may be eligible to receive from the Government of Canada. All you have to do is enter the following information:

 

  • Home Price: The price of the home that you want to purchase.
  • Annual Household Income: Your annual household income.
  • Down Payment Amount: The amount you are able to put down as a down payment on the home.
  • Property Type: The type of property you want to purchase (newly constructed or resale)

 

Once you’ve entered this information, the calculator will determine if you are eligible for the First-Time Home Buyer Incentive Program and how much of the down payment amount you may receive. This can help you make a more informed decision on your purchase and determine whether or not the program is right for you.

How Do I Learn More About This Program?

A great source for more information about this program is The Government of Canada – National Housing Strategy website.