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Helpful Programs For First-Time Buyers

Updated: Feb 15, 2020

Buying your first home can feel like a daunting process – especially when it comes to saving the minimum 5% down payment. Fortunately, there are plenty of programs available to help first-time buyers, just like you, achieve their new home dreams:

1. RRSP Home Buyer’s Plan

The (RRSP) Home Buyer’s Plan allows home buyers to withdraw up to $35,000, tax-free, from their RRSPs to be used as a down payment. Even better, your spouse may also draw an additional $35,000 to put towards your new home. Keep in mind, RRSP funds must be available a minimum of 90 days before purchase and repaid within 15 years (starting at the two-year mark).

2. First-Time Home Buyer Incentive

Established in 2019, the First-Time Home Buyer Incentive offers first-time buyers a shared equity mortgage – in which borrowers are offered a 5 or 10% down payment, in exchange for a government-owned equity stake in their home. To qualify, applicants must have already saved the minimum 5% down and have a qualifying household income of less than $120,000 (while borrowing less than four times their income).

3. Home Buyer’s Amount

The Home Buyer’s Amount (often referred to as the First-Time Home Buyer’s Tax Credit), offsets the costs of homeownership by allowing first-time buyers to claim $5,000 on their new home purchase. Valued at $750, the one-time tax credit is beneficial for recouping costs associated with land transfer taxes, legal fees, disbursements, etc.

Other Programs:

The following programs are also conducive to making homeownership more affordable for Canadian home buyers:

GST/HST New Housing Rebate

Intended for all home buyers, the GST/HST New Housing Rebate provides money-back on GST/HST paid on brand new builds, home renovations, major additions, and converting a non-residential property to a liveable home.

CMHC Mortgage Loan Insurance

CMHC Mortgage Loan Insurance (or mortgage default insurance) makes homeownership more affordable by allowing buyers to purchase a home with as little as 5% down. While this type of insurance will be added to your monthly mortgage costs, premiums are typically very affordable and will vary according to your down payment. For example:

  • Up to and including 95% = 4.00%

  • Up to and including 90% = 3.10%

  • Up to and including 85% = 2.80%

  • Up to and including 80% = 2.40%

Are you thinking of purchasing your first home? We can help! Our first-time buyer services are geared towards helping hopeful homeowners achieve their new home dreams. Start the process today by filling out our quick and easy pre-approval application!

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