New First Time Buyer Incentive is now available
First-Time Home Buyer Incentive (FTHBI)
CMHC will provide an extra 5% of your down payment for the purchase of existing homes, or 10% for the purchase of a new build. This will be an interest and payment free loan that will be registered against the title of your home. The program was started to help First Time Buyers reduce their Mortgage Default Insurance (CMHC Fees) and Mortgage Payments.
PROGRAM REQUIREMENTS
Must be a First Time Buyer
Have never purchased a home before
Have gone through a breakdown of marriage or common-law partnership (even if the other first-time home buyer requirements are not met)
In the last 4 years, has not occupied a home that either themselves or their current spouse or common-law partner owned
It’s possible that you or your spouse or common-law partner qualifies for the First-Time Home Buyer Incentive (if you are in a married or common-law relationship) with the 4-year clause even if you’ve owned a home
First time buyers would need to have their minimum 5% down payment from savings or gifted from an immediate family member. Then CMHC will provide an extra 5% of your down payment for the purchase of existing homes, or 10% for the purchase of a new build, reducing your mortgage balance
The mortgage must be default insured (total down payment less than 20%)
Your income must be less than $120,000 (Also, mortgage plus incentive cannot be more than four times the participants’ household income)
Must live in the property. Investment properties are not eligible.
Must be a canadian citizen, permanent resident, or non- permanent resident who is legally authorized to work in Canada.
No monthly payments are required. This amount can be paid back at any time, or upon the sale of the house.
Example 1:
A borrower purchases a $400,000 home with a 5% down payment and a 5% CMHC shared equity mortgage ($20,000), the size of the borrower's insured mortgage would be reduced from $380,000 to $360,000, helping to lower the borrower's monthly mortgage bill.
Example 2:
A borrower purchases a $400,000 home with a 5% down payment, which works out to $20,000. You could receive up to $40,000 through CMHC. Instead of taking out a $380,000 mortgage, you’d need to borrow only $340,000. This would lower your monthly mortgage bill from over $1,970 to less than $1,750.
Increasing the RRSP Home Buyers’ withdrawal limit from $25,000 to $35,000
Permits two first-time buyers in the same household to combine withdrawals for up to a $70,000 down payment (An increase from the previous $50,000)
Available for first-time homebuyers. But as of 2020, this program is eligible for those who split from their spouse or common-law partner, even if they are not first-time buyers
The funds must be repaid within 15 years, or the withdrawal will have tax implications
The new limit would apply to HBP withdrawals made after March 19, 2019