First Time Home Buyer Incentive

Applies to home purchases made on or after November 1st, 2019.

Canada Mortgage and Housing Corp. (CMHC) is implementing a program which helps new buyers pay to make the initial purchase of a property in exchange for an equity stake. This means, that the CMHC will help new home buyers to get your foot in the door without a co-signer. When you sell, the CMHC will recover their portion of the profit made on your property.

As with any program, there are some restrictions. In order to qualify:

1. You must be a first-time homebuyer.

2. The household’s income must be under $120,000, and the mortgage and incentive amount together can’t be more than four times the household income. This means the most a buyer can borrow and still be eligible is $480,000- not just for the mortgage, but also mortgage insurance and the FTHBI amount.

3. Buyers are responsible for a minimum down payment, which is 5% of the total purchase price up to $500,000 (with new Liberal government this may change to $800,000), and 10% after that.

4. Only insured mortgages will be eligible, meaning this will be restricted to those with a down payment worth less than 20% of the purchase price.

5. Buyers will not be exempt from the federal “stress test” regulations. This being a mandatory mortgage qualification using the five-year benchmark rate published by the Bank of Canada or the customer’s mortgage interest rate plus 2%.