Mortgage Professional First-Time Home Buyer Incentive Toolkit

The First-Time Home Buyer Incentive helped people across Canada purchase their first home.

The program offered 5 or 10% of the home’s purchase price to put toward a down payment. This addition to a down payment helped lower mortgage carrying costs, making homeownership more affordable.

• The Government of Canada will limit its share in the appreciation of a home at the time of repayment up to a maximum gain of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.
• The Government of Canada will also limit its share in the depreciation of a home at the time of repayment up to a maximum loss of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.
• In the case of appreciation, the above Incentive repayment calculation is retroactive to the implementation date of the First-Time Home Buyer Incentive (September 2, 2019). In the case of depreciation, the above Incentive repayment calculation applies to all borrowers who have signed a shared equity mortgage agreement on or after June 1, 2022.
• The Incentive is secured by a second mortgage on the title of the property. There are no regular principal payments. It’s not interest bearing and has a maximum term of 25 years.
• A port is considered a sale and that will trigger repayment of the Incentive.

Mortgage highlights:

• Mortgages must be eligible for mortgage loan insurance through either Canada Guaranty, CMHC or Sagen. The first mortgage must be greater than 80% of the value of the property and is subject to a mortgage loan insurance premium.
• The premium is based on the loan-to-value ratio of the first mortgage only. That is, the first mortgage amount divided by the purchase price. The Incentive amount is included with the total down payment.
• Mortgage loan insurance premiums may vary depending on the mortgage loan insurer and may be subject to provincial taxes.
• Total borrowing is limited to 4 times the qualifying income (4.5 times if the home you are purchasing is in Toronto, Vancouver or Victoria). The combined mortgage and Incentive amount cannot exceed 4 times the total qualifying income, and 4.5 times if the home you are purchasing is in Toronto, Vancouver or Victoria. (This doesn’t include the amount for the mortgage loan insurance premium.)
• The maximum threshold for debt service ratios is subject to requirements by lenders and mortgage loan insurers, and only applied on the first mortgage.
• The first mortgage can be switched to a different financial institution without having to repay the Shared Equity Mortgage Loan (‘the Incentive’). The terms of the first mortgage can’t be altered in this case.

Down payment requirements

• The minimum down payment was 5% of the first $500,000 of the lending value and 10% of the lending value above $500,000.
• For properties with 3 to 4 units, the minimum down payment was 10%.
• Borrowers had to meet minimum down payment requirements with traditional funds (savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member).

Repayment details

• The borrower must repay the Incentive after 25 years or when the property is sold, whichever comes first.
• The homebuyer can repay the Incentive in full at any time, without a pre-payment penalty.
• Before selling the property, the borrower must obtain approval of the sale from the Program Administrator. For more information, consult the Operational Policy Manual (PDF), section 7.12.
• Repayment is based on the percentage of the Incentive received and the property’s fair market value when repayment is required.
• The Program Administrator will work with borrowers who are experiencing financial hardship on a case-by-case basis to offer solutions to the repayment requirements.
• Refinancing of the first mortgage will not trigger repayment.
• Porting will trigger repayment of the Incentive.

Some lenders may require borrowers to repay the Incentive in certain refinancing situations.

Use these informational pieces to help your clients better understand the Incentive

Operational Policy Manual (PDF)

Questions & Answers (PDF)

Lender Checklist (PDF)

Use these application forms and legal documents to help your client apply for the Incentive

FTHBI - SEM Information Package (PDF) — For borrowers to use, solicitors to retain this document

SEM Attestation and Consent Form (PDF) — For borrowers to use, lenders to retain this document

Sample of key documents — Solicitor/Notary Instruction Package