New First Time Home Buyer Incentive

Written by Steven Crews,

As of September 2, 2019, the federal government’s home buyer’s incentive has begun.  I think that this is a fantastic program that every first-time home buyer should consider.  Let’s see how it works.

What is the home buyer’s incentive?

The first-time home buyer’s incentive program is a government shared equity program run through CMHC where you receive money in the amount of 5% or 10% of your purchase price.  The money you receive is given with no interest to pay. It’s set up as a 25-year term and repayment is required when you sell or at the end of the 25-year term, which ever comes first.

How do you qualify for the incentive?

There are 5 main requirements to qualify:

  1. you must be a first-time home buyer
  2. your qualifying income must be 120,000 per year or less
  3. the maximum mortgage amount is no greater than 4x your qualifying income
  4. you must come up with 5% down from your own resources or from a gift.

Calculate how much you qualify for by visiting

What factor determines whether I receive 5% or 10% incentive?

To receive 10% incentive, you must purchase a new construction home or condo.  If you purchase a re-sale home or a re-sale condo you will only receive 5% incentive.  You can also receive 5% incentive for the purchase of a new or used mobile home or modular home.

How do I pay back the money?

You must pay the money back if you sell your home.  The incentive has a 25-year term and will become due in full the 25th year you lived in your home.

How do I calculate how much I have to pay back?

When you pay back the money, you would multiply the incentive you received (either 5% or 10%) by the market value (sale price) of your home.  Let’s look at a couple of examples:

You bought your home for $400,000 and received $20,000 incentive.  This is 5% of your purchase price. Let’s compare 3 examples:

  1. If you sold for $400,000, then you would pay back 5% of that price or $20,000.
  2. If you sold the home for $450,000, then you would pay back 5% of that amount or $22,500. 
  3. If you sold your home for $350,000, then you would pay back $17,500. 


There are several benefits to first time home buyers who qualify for this incentive.  If you qualify, I would recommend that you take advantage of it. At the least, you will have a lower mortgage payment than if you didn’t take advantage of the program.