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Ottawa’s First-Time Home Buyers Incentive

Person holding keys after purchasing their home thanks to the first-time homebuyers incentive.
Feb 28, 2024 | Jason Anbara

Saving up a down payment to buy the first home can be challenging, especially for young people and families. Luckily, the Government of Canada recognizes the importance of helping Canadians achieve their homeownership goals, providing a variety of programs and incentives for first-time home buyers. 

Under the First-Time Home Buyers Incentive, borrowers can receive an additional 5% or 10% to put toward a down payment, thus reducing their monthly mortgage payments. Let’s take a closer look at how the Ottawa First-Time Home Buyers Incentive can help Canadians finance the purchase of their first homes:

Understanding the Ottawa First-Time Home Buyers Incentive

The First-Time Home Buyers Incentive is a government program under which qualifying home buyers can receive a 5% or a 10% down payment incentive for new construction homes to add to their down payment amount. 

In a nutshell, the incentive is a type of shared-equity mortgage with the Canadian Government. This means that the government shares in the up and down sale of the property value, up to 8% per annum, on the incentive amount. Homebuyers must repay the incentive amount whenever the property is sold or after 25 years, whichever happens first.

What is the Purpose of the Program?

The program is intended to help first-time home buyers reduce their monthly mortgage costs without increasing their financial burdens. With the help of the program, borrowers can increase their down payments, take out smaller mortgages, and, therefore, reduce their monthly mortgage payments.

Qualifications for Applicants

There are several criteria that homebuyers must meet to qualify for the First-Time Home Buyers Incentive:

  • You are a citizen of Canada, a permanent resident, or a non-permanent resident authorized to work in Canada.
  • You or your partner are a first-time homebuyer.
  • You meet the minimum down payment requirements with traditional funds.
  • Your total yearly qualifying income is $120,000 or less ($150,000 or less if you are purchasing a home in Vancouver, Toronto, or Victoria).
  • Your total borrowing (your mortgage amount plus the incentive amount) is no more than four times your qualifying income (4.5 times if you are purchasing a home in Vancouver, Toronto, or Victoria).
  • You are purchasing either a new construction home, an existing home, or a new or existing mobile/manufactured home.

Person looking at homes for sale on their computer.

Advantages of Participating in the Program

The key advantage of participating in the First Time Home Buyers Incentive program is that qualifying buyers can reduce their monthly mortgage payments. This makes homeownership more affordable, helping more Canadians achieve their dreams of purchasing their own home.

While you will still need to repay the incentive down the road, no additional monthly payments will be added to your budget.

Application Process

After you have been pre-approved for a mortgage and found your dream home, it’s time to apply for the First Time Home Buyers Incentive. You will need to fill out the FTHBI – SEM Informational Package and the SEM Attestation and Consent Form, which are available on the Government of Canada’s website; a mortgage broker can help you through this process.

Once done, your mortgage broker can share the application forms with your lender, who will submit the incentive application on your behalf. Finally, you’ll need to provide the signed copy of the shared equity mortgage documents to your lawyer to retain on your behalf.

Explaining Repayment Terms

The incentive amount must be repaid in full either after 25 years or when your home is sold, whichever happens sooner. You will also be required to repay the incentive if you want to buy out the co-borrower when porting your mortgage due to a partial release of security.

The home’s market value determines the repayment amount, which is equal to the percentage of the initial home value used to determine the incentive amount (5% or 10%).

 The maximum repayment amount depends on the following:

  • If the home’s value has increased, the incentive plus a gain of up to 8% per annum (not compounded) over the period between the date of the advance and the time of repayment.
  • If the home’s value has decreased, the incentive minus a loss of up to 8% per annum (not compounded) over the period between the date of the advance and the time of repayment.

Happy couple looking at a tablet with home buying incentives available to them.

Other Incentives to Consider

In addition to the First-Time Home Buyers Incentive, first-time home buyers may be eligible to take advantage of two other great money-saving benefits: the Home Buyers’ Plan and the First-Time Home Buyers’ Tax Credit.

Home Buyers’ Plan (HBP)

The Home Buyers’ Plan allows qualifying home buyers to withdraw tax-free funds from their Registered Retirement Savings Plans (RRSPs) to assist with the purchase of their first homes.

To qualify for the HBP, you must meet the following conditions:

  • You must be considered a first-time home buyer.
  • You must provide a signed agreement to build or buy a qualifying home.
  • Contributions must be in your RRSP for at least 90 days before they can be used under the HBP.

First-Time Home Buyers’ Tax Credit (HBTC)

The First-Time Home Buyers’ Tax Credit is another federal program intended to help Canadians with their homeownership goals. The HBTC is non-refundable, with the credit amount determined by multiplying the lowest personal federal income tax rate for the year by $5,000.

To qualify for the HBTC, you must meet the following criteria:

  • You or your partner bought a qualifying home in Canada.
  • The home will serve as your primary residence.
  • You or your partner are considered a first-time home buyer.

Final Thoughts on Ottawa’s First-Time Home Buyers Incentive

If you are a first-time home buyer, you may be able to benefit from Ottawa’s First-Time Home Buyers Incentive, along with other government programs like the Home Buyer’s Plan or the First-Time Home Buyers’ Tax Credit. If you aren’t sure whether you are eligible for these programs or need assistance in preparing your application, do not hesitate to reach out to us at Jason Anbara Mortgages. We would be happy to guide you through the process, making the mortgage approval process and home-buying journey as smooth as possible.


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Jason Anbara
Jason Anbara
Mortgage Broker
Jason Anbara, Founder, CEO, and Principal Mortgage Broker, has been dedicated to realizing the homeownership dreams of countless clients through his mortgage services business. A distinguished graduate in International Management with Honours, Jason also holds a Bachelor of Commerce from The Telfer School of Management at the University of Ottawa.

Driven by a passion for his community and the positive influence he has on both new and existing residents, Jason has garnered multiple accolades and awards. These recognitions underscore his unwavering commitment to providing exceptional customer service

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