Explore Our First-Time Home Buyer Guide for Canada

Programs and Support Designed for You

Buying (or building) a home is a major life decision. It’s also one of the single largest financial transactions you might make in your lifetime.

If you’re a first-time home buyer in Canada, this process can feel even more complicated. From setting a budget and ensuring your credit score is in the right place to applying for your first mortgage, there are all sorts of needs to consider.

Keep reading for some guidance that can help you buy your first home in Canada. We focus on opportunities for you to save money by taking advantage of a variety of government programs.

These programs are all specifically designed for first-time buyers. It’s likely that you qualify but be sure to follow the links to official information about eligibility for each of the options below.

First Time Home Buyers in Canada: Grants, Home Buyers’ Plan, and More

There’s good news for first-time buyers: You can access useful support and assistance programs. These offerings can help you lower the overall cost of your home and your monthly mortgage payments. Let’s take a look at a few of them.

First-Time Home Buyers in Canada: RRSP and Home Buyers’ Plan

If you have a Registered Retirement Savings Plan (RRSP), you may be eligible to temporarily withdraw as much as $35,000 to help fund the purchase or construction of your home. This is called the Home Buyers’ Plan.

You can also use this program to help buy or build a home for a related person with a disability.

Some key specifics about the Home Buyers’ Plan, shared by the Government of Canada:

You must qualify as a first-time home buyer in Canada. You cannot have lived in a home owned by yourself, or your current spouse or common-law partner, within a four-year period.
You need a written agreement to buy or build a qualifying home before becoming eligible.
You have a 15-year period to complete the first-time home buyer RRSP repayment process — to pay back any and all money borrowed.
Some RRSPs may not allow you to make a withdrawal, such as a group or locked-in RRSP.

First Time Home Buyer Credit in Canada

As a qualifying first-time home buyer, you can also benefit from a personal income tax credit. The official name of this credit is the Home Buyers’ Amount.

The maximum amount you can claim is $5,000, the Government of Canada explains. You may choose to claim it yourself or split it between yourself and your current spouse or common-law partner (as long as they live with you). In all cases, the maximum allowable claim is $5,000.

The only major requirements to claim this credit:

You must qualify as a first-time home buyer.
You must own a qualifying home (nearly any residential property you own will qualify).

First Time Home Buyer Incentive: Help with Down Payments

The First Time Home Buyer Incentive is essentially a loan from the Government of Canada to you. It supplements the funds you already have saved for a down payment.

Borrowers can request either 5% or 10% of the home’s purchase price, the National Housing Strategy explains. The loan lasts for 25 years, or until borrowers sell the home.

Because of the specific structure of the agreement, you do not have to pay interest on the loan. However, the amount you pay back will reflect the current market value of the home. You must pay back either 5% or 10% of the current market price, with some exceptions related to high appreciation or depreciation.

This program has somewhat stricter qualifications than the others we’ve reviewed so far. Conditions to determine eligibility beyond being a Canadian citizen or resident and meeting the definition of a first-time home buyer include, but aren’t limited to:

A qualifying income at or below $120,000.
The total borrowed is no more than four times your qualifying annual income.

Economic conditions in the Toronto, Vancouver and Victoria regions mean the figures above are altered if you live in those metropolitan areas. The qualifying income threshold is $150,000, and you can borrow up to 4.5 times your qualifying income.

Moving Forward with Your First Mortgage

At Innovation, we’re dedicated to helping you simplify your life and reach your financial goals. We reinvest our profits into our members, our communities, and our people. That includes allocating up to 4% of our pre-tax dollars every year for community improvements like grants, sponsorships, and scholarships.

When it comes to your first mortgage — or any mortgage — we’re here to help. Check out our mortgage calculators to get a better understanding of what you can afford and how rates can affect your payment.

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