Shop the best mortgage deals in Canada. approvU allows you to comparison-shop for the lowest rate mortgage deals across 25+ lenders and brands in Canada.
Mortgage Deals
Lenders & Brands
Huge Savings
The First-Time Home Buyer Incentive Program is an initiative by the federal government to help Canadian residents buy their first home. It is a shared equity program.
Under this program, the government will provide you with 5% (for an existing house) or 10% (for a newly built house) of the house value to purchase your first home.
For this, the government also will share the house’s equity benefits if you sell your home before the end of the 25-year amortization period.
This program is an interest-free loan forgivable if all conditions are met after a certain period.
The loan is forgivable after 25 years. You’ll have to pay back the amount borrowed and a proportion-appreciated property value if you sell the house before the end of the 25 years.
The incentive is registered as a second lien or mortgage on your property.
See Your Personalized Mortgages Online With approvU
For example, if you want to use this incentive to buy an existing property that is priced at $400,000:
Government incentive = 5% x $400,000 = $20,000
If, after three years, you sell the house for $570,000
You will have to repay the government the following:
The initial incentive amount of $20,000 PLUS 5% of the property’s increased value
Increased value = current market price – purchase price
$570,000 – $400,000
= $170,000
The first-time homebuyer incentive share of the increased property value is calculated as
5% of $170,000.00 = $8,500.00
Payback amount = incentive amount + proportion of increased property value
= $20,000 + $8,500 = $28,500
You will pay the government $28,500 if you sell the house before your initial 25 years amortization period ends.
If you decide that taking this incentive is worth it on a comparable basis, this loan will help you save on interest payments. It will also help you reduce your default insurance premium cost by putting more money down with the incentive.
The incentive amount is added to your down payment.
If you make a 5% down payment plus the 5% incentive, your total down payment will be 10%.
Here are several eligibility requirements when applying for the First Time Home Buyer Incentive Program:
Here are some reasons why a Canadian citizen might be ineligible for the First Time Home Buyer Incentive Program:
See Your Personalized Mortgages Online With approvU
The Canadian government’s first home buyer incentives launched on 2 September 2019 and will end either on 2 September 2022 or when $1.25 billion worth of incentives have been granted, whichever comes first.
Your loan amount is dependent on the future market value of the home. It would be either 5% or 10% of the total property value, without interest, and the amount must be shared with the government.
The threshold for incentive repayment is within 25 years or when you sell your property. Keep in mind that the government does not allow staggered payments. The payment must be a lump-sum amount. However, if you’re paying early, no fees or penalties will exist.
Yes. But you can only apply for 5%, even if the mobile home is brand-new.
This plan allows you to withdraw up to $35,000 (up to $70,000 for couples) from your Registered Retirement Savings Plan (RRSP) without any penalties to help you buy your first home.
You have 15 years to repay this money to your RRSP account. The first year after purchasing the house is the grace period, so repayment is required.
Learn More: A Comprehensive Overview Of The First-Time Home Buyer Plan
When you buy a house in a specific province, territory, or city in Canada, you must pay a land transfer tax or a land registration fee.
The land registry of each province or territory administers these taxes.
Some provinces and cities offer these tax rebates, which will help with the closing costs.
For example, qualified first-time homebuyers in British Columbia and Ontario can receive land transfer tax rebates.
You might also be entitled to a GST or HST rebate from the federal or provincial government.
This rebate is available to all homebuyers, not just first-time homebuyers.
To be eligible for this rebate, the house needs to be newly built or substantially renovated if it is an existing house.
The rebate depends on the home’s purchase price, and the house price must be $450,000 or less.
The First Home Buyer Tax Credit, or simply the home buyer’s tax credit, is a program offered by the federal government to make homeownership accessible to Canadian residents looking to buy their first home.
This program allows eligible first-time buyers to claim $5,000 as an income tax credit on a qualifying home. The $5,000.00 tax credit can get you a $750 tax rebate.
This program was introduced in 2009 as part of the federal government’s Economic Action Plan to help Canadians buy their first home.
The tax credit must be claimed within a year of buying your first home, and the purchased home must satisfy the qualification criteria outlined below.
© 2025 All Rights Reserved.
