Let's find out what it is and how it can help you turn your dreams of home ownership into a reality.
What is a First-Time Home Buyer Incentive Program (FTHBI)?
Under the First-time buyer incentive program, the government of Canada helps you finance part of your first home without raising the expense to you. The government will lend you a set amount based on the price of your home to put towards your down payment. A bigger down payment will mean less mortgage, leading to lower monthly payments. In addition, there are no pre-payment penalties, ongoing payments, or interest.
Do I Qualify for a First-Time Home Incentive Program?
In order to get qualified for the program, you need to pass the below eligibility criteria:
- You are a first-time home buyer.
- A citizen of Canada, a permanent resident, or a temporary visitor who has a valid work permit.
- The combined qualified annual income of all borrowers must be $120,000 or less for a property purchased in Canada or $150,000 or less for a property purchased in areas such as the Census Metropolitan Greater Toronto Area (GTAG T A), Greater Vancouver Area (GVAG V A), or Victoria.
But the Next Question is, Is Your House Eligible Too?
Let us answer your question, a newly constructed home and a re-sale residential home are eligible for the first-time home buyer Incentive Program. It must include the following:
- Homes for single family
- Duplex, triplex and fourplex
- Semi-detached homes
- Townhouses
- Condominium units
- Mobile/manufactured home
When Should I Repay the Amount?
For the repayment of the amount, there are a few factors that you need to consider. Your First-Time Home Buyer Incentive must be fully repaid when you sell your house or after 25 years, whichever comes first.
You can also choose to repay your incentive in full when you feel it is the right time to, without making any pre-payment penalty. This will come in handy if you receive a large amount of money, such as from a raise, a gift, or lottery winnings. Just keep in mind that any change in the value of your house will influence the amount you must repay.
Also Read:
- The Key to Homeownership: Uncovering the Best Mortgage Options in Canada
- What You Need To Know About Selling Your Home In Retirement In Canada
Conclusion
Buying a home can be much more affordable if you get qualified for the first-time home buyer Incentive. It is intended to reduce Canadians' monthly mortgage payments without raising their down payment. Although the reward is interest-free, it's essential to keep in mind that the sum you will have to repay will vary depending on the worth of your house. With the proper knowledge and planning, you are not far from achieving your dream home.