Buying your first home in a new country is a big deal, and it can feel overwhelming. But here’s some good news: the Canadian government has a program called the First-Time Home Buyer Incentive (FTHBI) that could make it easier for newcomers like you to enter the housing market.
Let’s break down how this program works and how you, as a new Canadian, can take advantage of it.
What Is the First-Time Home Buyer Incentive?
The FTHBI is a shared equity program, which means the government contributes up to 5% or 10% of the cost of your home to help reduce your mortgage and make your monthly payments more manageable.
- 5% for existing homes
- 5% or 10% for newly constructed homes
The best part? You don’t have to make monthly payments on this amount. You just pay the government back later, either when you sell your home or after 25 years, whichever comes first.
Can Newcomers Qualify for First-Time Home Buyer Incentive?
Yes! If you’re a permanent resident, non-permanent resident, or even a recent immigrant, you can qualify as long as:
- You’re buying your first home in Canada
- Your household income is $120,000 or less
- Your mortgage plus incentive is no more than 4.5x your income
- You’re putting down the minimum 5% down payment from traditional sources (like your savings or RRSP)
In certain cities with high property prices (like Toronto, Vancouver, and Victoria), income thresholds go up to $150,000 and the home price limit increases.
Why It Helps Newcomers
Let’s be real: starting fresh in a new country is expensive. Rent, furniture, deposits, immigration costs, it adds up. The FTHBI can help you get into the housing market with:
- Lower monthly mortgage payments
- A more affordable down payment
- Access to homeownership sooner
Instead of spending years saving up a massive down payment, you can use this incentive to reduce the amount you need to borrow and make owning a home feel within reach.
What’s the Catch?
There isn’t one exactly, but there is a trade-off: since this is a shared equity loan, the government will take the same percentage from your home’s future value when you sell or repay the incentive. So, if your home goes up in value, you’ll repay more than you borrowed. If it goes down in value, you’ll repay less.
Still, many first-time buyers find it worth it, especially in the early years when every dollar counts.
Real-Life Example for FTHBI
Let’s say you’re buying a new $500,000 home and qualify for the 10% incentive. That’s $50,000 the government puts in to help with your down payment. Your mortgage is now based on $450,000 instead of the full $500,000. That smaller mortgage = smaller monthly payments. Simple as that.
How to Get Started
Start by speaking with a mortgage advisor who understands the unique needs of new Canadians. At Niche Mortgages, we’ve helped many newcomers just like you take advantage of government programs, explore private lending options, and find the right mortgage fit.
We’ll help you:
- Check your eligibility for the FTHBI
- Estimate your affordability with our mortgage calculator
- Apply for the incentive along with your mortgage
Take the First Step Toward Homeownership
Homeownership doesn’t have to feel out of reach. With the right advice and access to programs like the First-Time Home Buyer Incentive, your first home in Canada could be closer than you think. Have questions? Contact Niche Mortgages for personalized advice on how to make your first home a reality with confidence.
Smmary of this FTHBI
Q: What is the First-Time Home Buyer Incentive (FTHBI)?
A: It’s a government program that offers 5%–10% of your home’s purchase price to help lower your mortgage and monthly payments. You repay this shared-equity loan when you sell the home or after 25 years.
Q: Can immigrants or newcomers qualify for the incentive?
A: Yes! Permanent residents, non-permanent residents, and recent immigrants can qualify—if it’s your first home in Canada, your household income is within limits, and you meet other standard requirements.
Q: How much can I get through this incentive?
A: You may receive 5% of the purchase price for resale homes and 5% or 10% for new homes.
Q: Do I have to make monthly payments on the incentive?
A: No. You only repay the incentive when you sell your home or reach 25 years of ownership whichever comes first.
Q: What’s the benefit for newcomers to Canada?
A: This program helps reduce your monthly payments and lets you buy a home sooner without needing a huge down payment.
Q: Is there a catch?
A: When you repay the incentive, it’s based on your home’s fair market value. If your home’s value increases, the repayment amount does too, but if the value drops, you repay less.
Q: How do I apply for the FTHBI?
A: You can apply alongside your mortgage application. It’s best to work with a mortgage advisor who understands the needs of newcomers to guide you through the process.
Q: Can Niche Mortgages help with the application?
A: Absolutely. We’ll assess your eligibility, calculate affordability, and help you apply confidently for both the mortgage and the incentive.