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  • Writer's pictureRoyal LePage

Is the First-time Homebuyer Incentive right for you?

To make it easier for first-time homebuyers to get into the market, the federal government unveiled an incentive where the government contributes to the purchase of the home through a shared mortgage. This allows a potential homeowner to access 5% or 10% depending on whether your home is being purchased as resale or a new build. Not only will this allow you to boost your down payment, it means lower monthly carrying costs.

What is a shared mortgage? By participating in the incentive, you are sharing your mortgage with the government. That means the government also shares the risk. For example, if you access 5% of the purchase price of a home through the incentive and the home’s value is $500,000, the government’s 5% share is worth $25,000. If the home is sold for $600,000, you must pay the government back $30,000. However, if the value of the home goes down, you pay back less. If the home is sold for $400,000, your repayment is $20,000.

To take advantage of the program, both you and the property must be eligible. It cannot be an investment property According to the Government of Canada’s website:

  • Your total annual qualifying income must not exceed $120,000 ($150,000 if the home you are purchasing is in Toronto, Vancouver, or Victoria).

  • Your total borrowing must be no more than 4 times your qualifying income (4.5 times if the home you are purchasing is in Toronto, Vancouver or Victoria).

  • You or your partner must be a first-time homebuyer.

  • You must be a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada.

  • You must meet the minimum down payment requirements with traditional funds (savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member).

  • The property must be in Canada and used for you to live in.

To learn more about participation requirements, how to apply, repayment structure and other important details, visit

Click here for the eligibility and savings calculator.


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