We are hosting a FREE drop-in Q&A session to answer the questions about the new First Time Home Buyer Government Incentive on Thursday August 29th, 2019 from 7:00pm to 8:30pm. The First-Time Home Buyer Incentive will be launching early Fall 2019. We can help you purchase your first home and provide clarity for how the program works and if the program is right for you and your situation! Join Mortgage Alliance Kim Nguyen (Mortgage Specialist) and Amanda Ku (Real Estate Agent) to learn how to buy a house (and apply for the First Time Home Buyer Incentive) in Calgary!
The borrower must meet minimum down payment requirements with traditional sources such as savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member. By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage.
General information about the First Time Home Buyer Incentive
The First-Time Home Buyer Incentive helps qualified first-time homebuyers to reduce their monthly mortgage carrying costs without adding to their financial burdens. The federal government is giving Canadians a chance to get into the Real Estate Market - The total amount of funding will be $1.25 billion over 3 years.
There are a few qualifications to apply for this incentive:
- you need to have the minimum down payment to be eligible
- your maximum qualifying income is no more than $120,000
- your total borrowing is limited to 4 times the qualifying income
If you meet these criteria, you can then apply for a 5% or 10% shared equity mortgage with the Government of Canada. A shared equity mortgage is where the government shares in the upside and downside of the property value.
The Incentive enables first-time homebuyers to reduce their monthly mortgage payment without increasing their down payment. The Incentive is not interest-bearing and does not require ongoing repayments.
Through the First-Time Home Buyer Incentive, the Government of Canada will offer:
- 5% for a first-time buyer’s purchase of a re-sale home
- 5% or 10% for a first-time buyer’s purchase of a new construction
You can repay the Incentive at any time in full without a pre-payment penalty. You have to repay the Incentive after 25 years or if the property is sold, whichever comes first. The repayment of the Incentive is based on the property’s fair market value (at the time of repayment or at the time when it is sold).
- You receive a 5% incentive of the home’s purchase price of $200,000, or $10,000.
If your home value increases to $300,000 your payback would be 5% of the current value OR $15,000.
- You receive a 10% incentive of the home’s purchase price of $200,000, or $20,000 and your home value decreases to $150,000, your repayment value will be 10% of the current value OR $15,000.
The Incentive is to help first-time homebuyers purchase their first home. Eligible residential properties include:
- new construction
- re-sale home
- new and re-sale mobile/manufactured homes
Residential properties can include 1 to 4 units
Types of residential properties include:
- single family homes
- semi-detached homes
- town houses
- condominium units