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Understanding the GoC’s First-Time Home Buyer Incentive

Understanding the GoC’s First-Time Home Buyer Incentive

Earlier this month, the Government of Canada launched a new program designed to help first-time buyers afford homes. Called the First-Time Home Buyer Incentive (FTHBI), this program reduces the initial and ongoing costs of homeownership by allowing Canadians to partner with the Government of Canada through shared equity mortgages.

Despite its straightforward name, the First-Time Home Buyer Incentive has been the cause of as much confusion as it has conversation. Today, we thought we’d run through the basics of how this program works — and more importantly, how you can make it work for you! Plus, we’ll explore the ways that the FTHBI can be paired with the full down payment grants currently available at Meadowview Point in Saskatoon!

To learn more about owning one of Saskatoon’s most affordable homes without paying anything down, call us today at (306) 974-1501.

How It Works

Assuming that you haven’t owned a home in the past four years, have a gross household income of less than $120,000, have saved up enough for a down payment or successfully applied for a full down payment grant — more on that later — you’re qualified to apply for a shared equity mortgage with the GoC.

If you land one, they’ll cover up to 10% of your monthly mortgage costs — saving you as much as several hundred dollars per month. While initially, that might not seem like much, the fact is: for many Canadians, the difference between having to rent and being able to own is marginal. A few percentage points knocked off of your monthly cost of living could be the financial spark that allows you to purchase your first property and begin building wealth.

If it is, and you decide to take advantage of the program, you’ll have up to 25 years — or until you sell the home — to repay the loan. When you do, the amount you owe will be calculated according to the current market price of your home. You can also choose to pay it off earlier and at no additional cost. The idea is to provide you with the financial freedom you need now to make the best long-term decision for you and your family. 

How Much Will I Qualify For?

That depends on two things: the cost of your home, and whether it’s pre-owned for new. If you were to buy a pre-owned property, you could expect to have up to 5% of the total cost of your mortgage covered. If, on the other hand, you buy directly from a builder, you can tack on an extra 5% and see your monthly mortgage costs reduced by a total of 10%.

In either case, the monthly savings provided by the First-Time Home Buyer Incentive are worth looking into if you want to own but aren’t sure you can.

Pairing the FTHBI With a Full Down Payment Grant

Part of the appeal of the FTHBI program is that it can be used in addition to other exciting financial assistance programs, such as the down payment grants we’re currently offering at Meadowview Point in Saskatoon! If you were to buy one of these stacked townhouses while taking advantage of the FTHBI program, you could do so without putting anything down!

As an example, let’s imagine that you were to purchase an Alder: a main-floor bungalow floorplan currently offered at Meadowview Point. In order to qualify for the FTHBI, you’d need to earn an annual household income of at least $56,343. Assuming that you qualified — both for the government program and for a full down payment grant — you’d be paying just under $1200 per month including the cost of your mortgage, condo fees, property taxes, and heating. You would be paying less to own than most people in this market pay to rent — all without having to overcome the initial burden of a down payment!

To run the monthly numbers on any of our thirteen floorplans, or to learn more about how our programs pair with the FTHBI, call us today at (306) 974-1501. To discover other exceptional homes being built near you, browse our Communities Page.