Are you dreaming of buying your first home but worried about coming up with a hefty down payment? Well, we’ve got some exciting news for you! The First-Time Home Buyer Incentive is here to make your home ownership dreams a reality. In this blog, we’ll break down everything you need to know about this program in simple terms, so you can take that important step towards owning your very own home.
What is the First-Time Home Buyer Incentive?
The First-Time Home Buyer Incentive is a fantastic program designed to assist people all across Canada in purchasing their very first home. This program offers a boost of either 5% or 10% of your new home’s purchase price to put towards your down payment. But why is that so great? Well, that extra money towards your down payment will reduce your monthly mortgage payments, making the idea of owning your own home much more affordable.
Extra Benefits for Certain Areas
Are you planning to buy your first home in the Toronto, Vancouver, or Victoria Census Metropolitan Areas? If so, you’re in luck! The program now offers an increased Qualifying Annual Income of $150,000 instead of the previous $120,000. You can also borrow up to 4.5 times your qualifying income instead of the previous 4.0 times. To see if your desired home is in one of these areas, be sure to double-check before applying!
Exciting Updates to the Program
The Government of Canada has made some recent updates to the First-Time Home Buyer Incentive that could benefit you even more. One significant change is that the government will now limit its share in the appreciation of your home. What does that mean for you? It means that you’ll only have to pay back a maximum of 8% per year (not compounded) on the Incentive amount, from the date you receive it to the time you repay it. This is fantastic news because it allows you to keep more of the profit if your home increases in value.
But what if your home’s value goes down? No worries! The government has you covered there too. They will limit their share in the depreciation of your home, with a maximum loss of 8% per year (not compounded) on the Incentive amount, from the date you receive it to the time you repay it.
Important Dates to Remember
For those who see their home’s value appreciate, these new repayment calculations are retroactive to the implementation date of the First-Time Home Buyer Incentive, which was September 2, 2019. In the case of depreciation, the new repayment calculation applies to all borrowers who have signed a shared equity mortgage agreement on or after June 1, 2022.
Already Repaid the Incentive?
If you’ve already repaid the First-Time Home Buyer Incentive, there’s good news for you as well. CMHC has partnered with FNF Canada to handle reimbursements for eligible borrowers. If you qualify, FNF Canada will reach out to you and guide you through the reimbursement process.
In conclusion, the First-Time Home Buyer Incentive is an incredible opportunity for first-time home buyers across Canada to make home ownership more accessible and affordable. So, if you’ve been dreaming of owning your own home, it’s time to explore this fantastic program and take the first step toward making your dream a reality. Happy house hunting!
Please contact Jared Gibbons, your local realtor, should you have any questions!