Canada’s First Time Home Buyer Incentive Program (FTHBI)

The Mortgage Force Team is an authorized originator of this incentive program

Despite popular misconception, no, the government is not paying for your down payment. The First Time Home Buyer Incentive Program is simply designed to lower mortgage payments for first time home buyers by providing them with an equity shared interest and payment free mortgage loan in addition to their regular mortgage. Applicants will need to meet all regular requirements and terms of a traditional insured mortgage. Once these requirements are met, the Canadian government will provide up to 10% of the purchase price of a newly constructed home, or 5% of the purchase price of a resale home (home that has had a previous owner). This loan would be IN ADDITION to your minimum 5 % down payment. This loan will have to be paid back in full within 25 years, or if the home is sold, whichever occurs first. If the value of the home increase/decreases, and there are any capital gains/ losses, the government will participate in the gains/losses with you, as they will share the equity. Total borrowing under this program is limited to 4 times the applicant’s income.

We’ve compiled some frequently asked questions:

Do I qualify for this program?

You qualify for this incentive program if;

At least 1 applicant is a first-time home buyer, all applicants are legally authorized to work in Canada, and the total income on the application does not exceed $120,000. All requirements for a traditional insured mortgage must also be met.

What if I have no down-payment? Will the gov’t provide the 5% down payment?

Unfortunately, not. under this program, applicants must have at least 5% down and a maximum of 14.99% down to take advantage of this program.

When do I need to pay this loan back?

When you sell your home, you MUST pay the loan back. If a sale does not occur, you may choose to pay the loan back in full at anytime before 25 years has elapsed. At 25 years, you must pay it back. This loan must be paid back in full and cannot be partially paid back.

How do I know how much I need to pay back?

At the time of repayment, you will pay back the full equity stake. For example; let’s assume you purchase a condo for $200,000 and borrowed 5% from the govt ($10,000). Lets also assume in 10 years you sell the condo and the value has increased to 250,000K. The amount you would pay back would be 5% of $250,000K ($12,500). In this same scenario if the value dropped to $150,000 when you sold, you would pay back 5% of $150,000 ($7500).

The Mortgage Force Team is an authorized originator of this incentive program. We are always happy to answer any questions you may have. Give us a call to get started or fill out our online mortgage application form!

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