First Time Home Buyer

"What Are Your First Time Home Buyer Benefits?"

Purchasing a new home is a big commitment and can seem stressful at times. While your mortgage could be the single most important financial decision of your life, it’s important to have a professional help you simplify the process and recommend strong financing solutions to get your mortgage approved at the markets most competitive rate and with the maximum flexibility.

As a first-time home buyer, you are entitled to a number of options. Let’s review a few of these below:

First Time Home Buyer Incentive

This incentive helps provide first time home buyers with a secondary means of down payment that results in either a larger down payment therefore, lower monthly payments, or the ability to save less for your overall down payment.

There are no additional monthly payments associate with this incentive and the first-time home buyer may repay the loan at any time without incurring pre-payment penalties.

With this incentive, the Government of Canada provides:

  • 5% or 10% for a first time home buyers purchase of a new build home.
  • 5% for a first time home buyer purchasing an existing home.
  • 5% for a first time home buyer purchasing a new or resale of a mobile/manufactured home.

Who is this incentive for?

  • First time home buyers.
  • Household incomes that do not exceed $150,000 annually. 
  • The down payment must be greater than 5%.
  • The down payment must not exceed 20%.

What is my max purchase price?

  • The maximum purchase price under this incentive is 4.5x your annual household income (up to a maximum household annual income of $150,000).
  • What this means is your maximum mortgage under this incentive will theoretically be $722,000.

How is this loan paid back?

  • The loan must be paid back after 25 years or when the home is sold.
  • The government will share in their 5% or 10% interest on the upside, as well as the downside, meaning the buyer is partially protected should the market drop.

First Time Home Buyer Program

This program helps first time home buyers reduce or even eliminate the cost of property transfer tax at closing when purchasing your first home. Upon qualifying for this program, a first time home buyer may be eligible for either a full or partial exemption from paying this property transfer tax.

Do I qualify?

  • Must be a Canadian citizen or permanent resident.
  • Filed at least 2 income tax returns in BC in the past 6 years.
  • Never owned an interest in property anywhere in the world at any time.
  • Have not received the first time home buyers program rebate.
  • Property must be your primary residence.
  • Must occupy the property within 92 days and live in the property for 1 year.
  • Have a fair market value of $500,000 or less. Partial rebate up to $525,000.

What if one applicant does not qualify?

  • If one applicant does not qualify, then only a percentage of the homes interest will apply to this rebate. If both applicants have a 50/50 ownership, then only 50% will apply to the property transfer tax exemption.

Home Buyers Plan

This program allows home buyers to pull up to $35,000 from their registered retirement savings plan (RRSP) to purchase a home. The Home Buyers Plan can also be used to build a qualifying home for yourself or a related individual with disability. It’s important to note that you have up to 15 years to pay these funds back TAX FREE.

Ultimately, we at Riley Boychuk Mortgages understand that the process can be tricky, and is why we are with you every step of the way; from your pre approval, to the purchase of your new home, closing with your lawyer, and throughout the life of your mortgage. This is why it’s important to speak to a professional to better understand what you are entitled to as a first time home buyer. Contact us today to learn more.

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