Last week, the federal government announced that the eligibility criteria for the First Time Home Buyer Incentive (FTHBI) will be expanded immediately in key cities, Toronto, Vancouver, and Victoria, to account for their high purchase price.
Under this new incentive, buyers in qualifying markets are now eligible for an increased qualifying annual income of $150,000 and an increased total borrowing amount of four and a half times their qualifying income.
What is the First Time Home Buyer Incentive
First introduced in 2019, the FTHBI is designed to alleviate mortgage costs for first-time home buyers, reducing monthly payments by providing shared equity loans of 5% toward the down payment of a resale home, and 5% or 10% for newly-built homes. By boosting the size of buyers’ down payments, the FTHBI whittles down monthly mortgage costs, offering some relief on the costs of homeownership.
Previously, to qualify for the incentive, the combined household income for the buyers could not exceed $120,000 and the Mortgage-to-Income Ratio could not exceed four times their annual income. This capped the maximum purchase price eligible for this program with a minimum 5% down payment to $505,000.