Buying your first home can seem like an overwhelming task. Luckily, a new incentive created by the federal government helps first time home buyers take the plunge on this big investment by targeting affordability.
The First-Time Homebuyer Incentive (FTHBI) aims to lower monthly mortgage payments without increasing down payment costs. Here is a breakdown of the key things you should know about the incentive.
Although this sounds like a win-win opportunity, there are some things you'll want to think about before applying.
Eligibility is quite difficult to maintain for various reasons. Run by Canada’s federal housing agency, the FTHB Incentive doubles as a shared-equity mortgage program, meaning they do take part in your homeownership journey. The incentive, under the Canada Mortgage and Housing Corporation, will offer new homeowners 10 percent towards the down payment of a new build, or 5 percent towards a resale, both interest-free.
Heres the catch, the combined income of both homeowners can not exceed $120,000, which may seem unapproachable for those hoping to apply. This also means that the maximum property value under this program is only roughly $560,000, seemingly unrealistic for the cities housing market value.
With every loan comes to the pay back plan, however, in this case, there are only two certainties. The loan must be paid back if you were to ever sell your home, or within a 25 year period.
The federal government has taken a step in the right direction when it comes to targeting affordability in an always spiralling housing market. Although every incentive comes with its hidden snags, the FTHB will ultimately help first time home buyers make this life-changing investment.