The First-Time Home Buyer Incentive

The First-Time Home Buyer Incentive helped qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.

The First-Time Home Buyer Incentive was a shared-equity mortgage with the Government of Canada, which offered 5 or 10% of the home’s purchase price to put toward a down payment. The shared equity component of the Incentive means that the government shares in both the upside and downside of the property value, up to a maximum gain or loss equal to 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

By obtaining the Incentive, the borrower would not have to have saved as much of a down payment to be able to afford their mortgage payments. The effect of the larger down payment was a smaller mortgage and, ultimately, lower monthly costs.

The homebuyer will have to repay the Incentive based on the market value of the home at the time of repayment equal to the percentage (for example, 5% or 10%) of the original home value used to determine the Incentive, up to a maximum repayment amount equal to:

• where the home’s value has appreciated, the Incentive plus a maximum gain of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment; or
• where the home’s value has depreciated, the Incentive minus a maximum loss of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a pre-payment penalty.

How do I repay the Incentive?

Repayment Details

The Incentive must be paid in full — that is no partial payment — after 25 years or when the home is sold. There are a few ways where changes to the Incentive can trigger repayment:

• You go through a breakup and you want to buy out the co-borrower. If this requires additional insured funds, you must pay back the Incentive in full.
• Porting your mortgage will trigger a repayment of the Incentive.
• A partial release of security is considered a sale and will trigger repayment of the Incentive.

Use these resources for more details on the Incentive

• Repayment Document (PDF): A step-by-step process along with key information.
• Appraisal Document (PDF): Appraisal checklist to be provided to the appraiser in the case of a voluntary repayment or at the 25-year mark.
• Operational Policy Manual (PDF)
• Questions & Answers (PDF)

Borrowers should discuss with their lender if repayment of the Incentive is required under certain refinancing situations.

For mortgage professionals

Use these resources to help your clients better understand the Incentive

• Operational Policy Manual (PDF)
• Questions & Answers (PDF)
• Lender Checklist (PDF)

Use these application forms and legal documents to help your client apply for the Incentive

• First-Time Home Buyer Incentive – Shared Equity Mortgage Information Package (PDF) — For borrowers to use, solicitors to retain this document
• Shared Equity Mortgage Attestation and Consent Form (PDF) — For borrowers to use, lenders to retain this document
• Sample of key documents — Solicitor/Notary Instruction Package:
  • Instructions to Solicitor/Notary (PDF)
    • Common Law
    • Québec
  • Shared Equity Mortgage and Borrowing Disclosure Statement (PDF)
    • Common Law
    • Québec
  • Standard Mortgage Terms for Shared Equity Mortgage (Common Law) (PDF)
  • Deed of Hypothec (Québec) (PDF)

Looking for homebuying tools and resources?

Knowing what to expect throughout the entire homebuying process can lead to more well-informed decisions, and a better homebuying experience overall.

Explore our range of homebuying tools and resources to help you make your homebuying decisions with confidence.

Guides

• Homebuying Step by Step Guide (PDF) and Workbook (PDF) — Find everything you need to help you buy a home in Canada, including worksheets, calculators and checklists.
• Condominium Buyer’s Guide — Get detailed information on buying a condominium.
• Newcomers’ Buying Guides — Read homebuying information in 8 different languages!

Calculators

• Affordability Calculator — Estimate how much mortgage you can afford.
• Debt Service Calculator — Compare monthly debt payments and expenses to income.
• Mortgage Calculator — Explore rates, payment frequency, amortization options and more.

Other useful information

• Your Credit Report — Learn more about the simple steps you can take to maintain a good credit history and improve your chances of being approved for a mortgage.
• Mortgage Planning Tips — See how planning your mortgage in advance can help you save money in the long run.
• Mortgage Fraud — Read these valuable insights that can help protect you from mortgage fraud.