For those of you looking for a bit of a break getting into the housing market, you may be in luck! The new federal governments First-Time Home Buyer Incentive FTHBI is designed to alleviate mortgage costs for first-time home buyers and as of September 2nd will officially be open for business.
So, how does it work?
The government will provide shared equity loans of 5% toward the down payment of a resale home, and 5% or 10% for newly-built homes. The intention behind the incentive is by increasing the buyers downpayment, monthly mortgage costs will decrease, in turn providing some relief to the costs of home ownership. For example, a buyer receiving the maximum 10% loan on a newly-built home could save as much as $286 per month, resulting in $3,430 in savings per year, according to the CMHC. The funds provided are registered as a second mortgage, and don’t incur interest. This second mortgage must be paid back in full when the first insured mortgage matures at 25 years or when the home is sold, whichever comes first, though homeowners may pay it back as a lump sum early without penalty.
Because it is a shared equity mortgage rather than a traditional cash-value loan, the amount to be paid back will fluctuate along with the value of the home over time: if the home’s assessed value rises, the loan repayment will increase by the same per cent. However, the same will occur if the home has lost value by the time it is sold or the mortgage matures.
For example, let’s say the CMHC provides a 5% loan of $25,000 for a home purchase of
$500,000. The homeowner sells the home several years later, and its value has increased to $550,000. The homeowner would then need to pay the CMHC back $27,500 to reflect 5% of the increased value of the home. However, if the home loses value over that time period, only the original amount of $25,000 would be due to the CMHC upon its sale.
Who qualifies?
- At least one person in the household must be a first-time home buyer, meaning they have not owned a home, or dwelled in a home owned by their spouse, over the last four years. (An exception is made for buyers who’ve had a breakdown of marriage or common-law relationship.)
- Buyers must have a minimum 5% down payment saved in order to qualify for an insured mortgage.
- Buyers’ combined household income cannot exceed $120,000. This includes the income of any guarantors co-signing on the mortgage, as well as any rental income generated if part of the home is tenanted out.
- The buyers’ Mortgage-to-Income Ratio (MTI) cannot exceed four times their income, including the portion that’s provided by the FTHBI. This means the maximum down payment for a resale home cannot exceed 14.99%, and 9.99% for a new build.
Who Will Benefit from the FTHBI?
Some mortgage experts point out that borrowers taking out a traditional mortgage would
actually qualify for a larger loan based on more generous MTI criteria, while others argue that home buyers could be on the hook for a much larger loan repayment if they live in a particularly hot market where real estate prices are rising.
There are concerns the criteria of the FTHBI are too restrictive to really help the average first time buyer. For example, a household earning the maximum income of $120,000 and making a 5% down payment would be limited to a resale home purchase price of $505,000 – an amount too low to have much traction in larger markets.
For example, buyers are hard pressed to find a resale home within the eligible price range in the City of Toronto, where the average home price came to a whopping $937,804 in May. In fact, there are only 13 out of the city’s 35 MLS district neighbourhoods where such homes are available – and options are limited to condos located away from the city core, including North York condos and Etobicoke condos.
Have more questions about the FTHBI or want to see if its a good choice for you, give me a call at 416-809-4544 and we can discuss the options available to you!
RELATED POSTS
Can You Sever Land in Dufferin County?
Owning a property with several acres of land in Dufferin County can open the door to some interesting possibilities. Maybe you have a large rural property in Amaranth with land you’re not using, a family property in Mono that you’d like to divide between generations, or acreage in Mulmur that you believe could accommodate another
Cost of Living in Dufferin County, Ontario
If you’re thinking about moving to Dufferin County, chances are you’ve already spent some time looking at homes for sale in Orangeville, Shelburne, Mono, or one of the surrounding communities. Maybe you’re hoping to find a larger home for your growing family, looking for more outdoor space, or simply considering a move away from the
Things to Do in Dufferin County This October: Your Local 2026 Fall Guide
There is something about October in Dufferin County that makes you want to slow down and actually enjoy where we live. The mornings are cooler, the leaves are changing, the farm stands are full of pumpkins, and even an ordinary drive between Orangeville and Shelburne can feel like a fall outing once the colours are
What Does $500K, $750K, $1M or $1.5M Buy You in Dufferin County in 2026?
If you’re thinking about buying a home in Dufferin County, one of the first questions you probably have isn’t “What’s the average sale price?” It’s much simpler: What can I actually get for my budget? And if you already own a home in Orangeville, Shelburne or elsewhere in Dufferin County, you may be asking the
New Developments Coming to Dufferin County: What’s Being Built in 2026 & Beyond
Updated September 2026 If you live in Dufferin County, or you’re considering moving here, you’ve probably noticed something: the area is growing. New homes are being proposed, subdivisions are expanding, commercial spaces are changing, and communities like Orangeville, Shelburne and Grand Valley are planning for what the next several decades could look like. And this
Should You Sell Your Home Before Buying?
If you’re thinking about moving, there’s a good chance one question has been holding you back: Should we sell our current home first, or find our next home before we sell? It’s one of the most common conversations we have with homeowners in Shelburne, Orangeville and throughout Dufferin County. And there isn’t one answer that