Get the Scoop on the First-Time Home Buyer Incentive
The First-Time Home Buyer Incentive allows eligible first-time home buyers with a minimum down payment to have a portion of their purchase financed through a shared equity program with the Government of Canada. In plain language, what this means is the Government of Canada “buys” 5 to 10% of the house and you don’t have to make mortgage payments on that portion until you sell it. When you do sell down the road, you have to repay them their share… 5% of what it’s worth at the time of sale.
It sounds pretty good at first glance. Here are some of the benefits:
- Interest-free incentive
- No pre-payment penalty
- Lower monthly payments
Here’s some of the possible downsides:
- Your income must not exceed of $120,000
- There are limits on the price of the home you can purchase. You can only borrow up to 4 times your income, resulting in a maximum loan of $480,000
- You could have a hefty amount to repay when you sell, if the value of your house rises significantly. You may also have to repay it before you sell, if it changes use for instance and becomes a rental property.
Here’s a helpful document you can download, provided by a friend of Schmidt and trusted mortgage professional Stacey Shepherd. It will answer a lot of your questions! Click here to download
And if you want even more info, here’s a great resource from the Government of Canada. They even made videos to make it user-friendly 😊
Our brokerage has a number of REALTORS® who are Accredited Buyer Representatives (ABR®), specializing in working with first-time buyers. We understand you’ve got a lot of questions. Sometimes once you look into things a bit more you might decide you’ll wait to save up more of a down payment, sometimes it means buying something a bit smaller than you’d hoped to start out with… Whatever your situation, we can help you create a plan customized to get you into your dream home, one step at a time.
Reach out anytime! We’d love to have a chat over coffee and share what we know that can help you make a smart choice. No obligation, just friendly information. In the meantime, here’s a link to download our Home Buyer Guide. It will help you figure out if you’re ready to make the leap! Home Buyers Guide – Your path to a smart purchase