How will the new First Time Home Buyers’ incentive help you?

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The current economic market has made it increasingly more difficult for many Canadians to purchase a home. With inflated real estate prices, strict mortgage stress test rules and high interest rates, the average home buyer needs a six figure income just to qualify for a reasonable mortgage in the Greater Toronto and Vancouver areas. Although the stress test introduced in 2018 successfully helped in cooling real estate prices, it left many struggling to purchase a home they could afford. This has prompted mortgage industry experts all over the country to urge the government to loosen mortgage qualification regulations. Although stress test rules have yet to change, the much anticipated 2019 budget features a new incentive projected to aid first time home buyers in achieving their goal buying their dream home.


Excited Young Couple – First Time Home Buyers

On March 19th, the federal budget implemented a new First Time Home Buyers incentive expected to help housing affordability. According to the incentive, the Canadian Mortgage and Housing Corporation (CMHC) will loan up to 10% of the purchase price so borrowers can take out a smaller mortgage. The amount a borrower receives will depend on the type of house they are purchasing. A newly constructed house is eligible to receive up to 10% of the purchase price while an already existing home can qualify for up to 5%. CMHC claims they project to provide about $1.2 billion in down payment assistance over the next 3 years. This new incentive is expected to be put into effect in September of 2019.

The 2019 first time buyer incentive has the ability to help many Canadians qualify for a mortgage they might not have been able to secure before by effectively minimizing the total loan and subsequent payments which makes qualification easier. However, there are a few rules and exemptions that come alongside the positives. In order to qualify, a first time buyer must have default mortgage insurance, meaning they have purchased insurance from the CMHC because they cannot provide a 20% down payment. Secondly, the buyer must have an annual income that is less than $120,000 and a purchase price of no more than $505,000. This deal applies only when the insured mortgage amount including the incentive amount is less than 4 times the buyer’s annual income.

Despite the restrictions imposed on the new First Time Home Buyers incentive, it is intended to help many Canadians get a few steps closer to owning a home. Although the incentive won’t officially be implemented until September, it’s never too early to start planning your first purchase. The trusted mortgage agents at Clover Mortgage can help you get started on the application process and provide mortgage planning to assess whether you will be able to qualify under the new incentive.

Call or text us today at 416-674-6222 or toll free at 1-800-673-2230 , or email us at to speak with a licensed Clover Mortgage professional and get started on buying your dream home today!

Steven Tulman
Written By Steven Tulman
“Making the process of getting a mortgage an easy and enjoyable experience for every Clover Mortgage client!”