Blog Post

What You Should Know About the Government’s New FTHB Incentive

Dan Caird • September 9, 2019

Launched on September 2nd 2019, the first time home buyer’s incentive is designed to help qualified first time home buyers reduce their monthly expenses. The goal is to make housing more affordable. The government of Canada has set aside $241M for the program and has estimated it will help 100,000 Canadians over the next 3 years.

Program highlights.

Your mortgage must be default insured, CMHC‌ will provide 5% of the downpayment for an existing home, or 10% downpayment for a new build construction.

Your income must be less than $120,000 per year and you must meet the criteria of being a first time home buyer. The insured mortgage plus incentive cannot be more than four times your household income.

There are no repayments required while you have your mortgage, however, you can pay it back anytime or upon the sale of your property. There will be some risk-sharing with the government.

Consumer Sentiment

According to a recent survey completed titled “Home Buying is Hard Work” by Mortgage Professionals Canada, Canadians are in “moderate agreement” that the new First-Time Home Buyer Incentive will “make it easier for Canadians to afford a home.”

However, among existing homeowners, most say they would not have used the program when they bought their first home, while most respondents also said they would not be willing to give up equity in their home.

Mortgage Professionals Canada Chief Economist Will Dunning expects the program will result in less than 5,000 incremental first-time purchases per year.

The More You Know

If you’re looking to buy your first home, and are considering the first time home buyer’s incentive program, the most important thing you can do is collect all the information and consider all your options.

Unfortunately, understanding mortgages can be difficult. There is a lot of information to consider when simply qualifying for a mortgage, without adding the stress of government programs, and what these programs mean for you, long term.

The good news is that you don’t have to navigate everything alone.

As an independent mortgage professional, my job is to help you qualify for the best mortgage available, using the best programs and incentives available. I’d love to walk you through all your options and explain in detail the ramifications of using a program like the first time home buyers incentive. It might be a fit for you, however, it might not be. Let’s talk!

Please contact me anytime , I’d love to discuss buying your first home!

Share

DAN CAIRD
Mortgage Agent | DLC

RECENT POSTS

Financing For A Second Home

By Dan Caird • February 19, 2025
If you’ve been thinking about buying a second property and you’re looking to put some of the pieces together, you’ve come to the right place! Whether you’re looking to buy a vacation property, start a rental portfolio, or help accommodate a family member, there are many reasons to buy a second property (while keeping your existing property), which might make sense for you! Now, while there are many great reasons to buy a second property, there is also a lot to know as you walk through the process. The key here is to have absolute clarity around your why. Ask yourself, why do you want to buy a second property? This isn’t a decision to be taken lightly or one that should be made too quickly. Buying a second property should be a strategic decision that allows you to accomplish your goals, and it should include an assessment of your overall financial health. So with clear goals in mind, the best place to start the process is to have a conversation with an independent mortgage professional. This will allow you to assess your financial situation, outline the costs, and put together a plan to make it happen. While purchasing a second property is similar to buying a primary residence, there are some key differences. Just because you’ve qualified in the past for your existing mortgage doesn’t mean you’ll qualify to purchase a second property. One key difference is the amount of downpayment you might be required to come up with. A property that is owner-occupied or occupied by a family member on a rent-free basis will require less of a downpayment than if the second property will be used to generate an income. So, depending on the property's intended use, you might have to come up with as much as 25%-35% down. This is where strategic planning comes in. Consider unlocking the equity in your existing home to finance the downpayment to purchase your second home. Here are a few ways you can go about doing that: Securing a new mortgage if you own your property clear title Refinancing your existing mortgage to access additional funds Securing a home equity line of credit (HELOC) Getting a second mortgage behind your existing first mortgage Securing a reverse mortgage The conversation about buying a second property should include assessing your overall financial health, leveraging your existing assets to lower your overall cost of borrowing, and figuring out the best way to accomplish your goals. And as it's impossible to outline every scenario in a simple blog post, if you’d like to discuss your goals and put a plan together to finance a second property, connect anytime. It would be a pleasure to work with you.

Mortgage Refinance To Consolidate Debt

By Dan Caird • February 12, 2025
If you’re a homeowner looking to optimize your finances, consider taking advantage of your home’s equity to reposition any existing debts you may have. If you’ve accumulated consumer debt, the payments required to service these debts can make it difficult to manage your daily finances. A consolidation mortgage might be a great option for you! Simply put, debt repositioning or debt consolidation is when you combine your consumer debt with a mortgage secured to your home. To make this happen, you’ll borrow against your home’s equity. This can mean refinancing an existing mortgage, securing a home equity line of credit, or taking out a second mortgage. Each mortgage option has its advantages which are best outlined in discussion with an independent mortgage professional. Some of the types of debts that you can consolidate are: Credit Card Unsecured Line of Credit Car Loan Student Loans Personal or Payday Loans Most unsecured debt carries a high interest rate because the lender doesn't have any collateral to fall back on should you default on the loan. However, as a mortgage is secured to your home, the lender has collateral and can provide you with lower rates and more favourable terms. Debt consolidation makes sense because it allows you to take high-interest unsecured debts and reposition them into a single low payment. So, when considering the best mortgage for you, getting a low rate is important, but it’s not everything. Your goal should be to lower your overall cost of borrowing. A mortgage that allows for flexibility in prepayments helps with this. It’s not uncommon to find a mortgage at a great rate that allows you to increase your payments by 15% per payment, double your payments, or make a lump sum payment of up to 15% annually. As additional payments go directly to the principal repayment of the loan, once you’ve consolidated all your debts into a single payment, it’s smart to take advantage of your prepayment privileges by paying more than just your minimum required mortgage payment, as this will help you become debt-free sooner. While there is a lot to unpack here, if you’d like to discuss what using a mortgage to reposition your debts could look like for you, here’s a simple plan we can follow: First, we’ll assess your existing debt to income ratio. We’ll establish your home’s equity. We’ll consider all your mortgage options. Lastly, we’ll reposition your debts to help optimize your finances. If this sounds like the plan for you, the best place to start is to connect directly. It would be a pleasure to work with you.
Share by: