May 2021 First Time Home Buyer Incentive Changes
The Federal Government has announced they will be increasing the First-Time Home Buyer Incentive (FTHBI) program in the Greater Victoria area. The changes will take effect May 3, 2021.
Currently, the criteria allows for a max purchase price of four (4) times the borrower’s household income up to $120,000 on an insured mortgage. This allows for a max purchase price of $505,000 assuming the borrower(s) qualify. This will continue to apply in other parts of Canada.
After May 3rd, the max mortgage size in the expanded areas will be 4.5 times to a maximum annual household qualifying income of $150,000 on an insured mortgage. If the first time home buyers annual income is over $150,000 they would not be eligible.
In doing the calculations, if the borrower(s) made the max $150,000 this would allow them to purchase to a max of $722,000 assuming they have the only the minimum down payment saved on their own – $47,200 in this case. The government would then be able to chip in an additional 10% stake and ownership ($72,200) to help lower their mortgage amount.
The guidelines of the program still remain the same – this is to help the borrower lower their monthly mortgage payment by getting assistance with the down payment via the government incentive. It does not help the buyer increase the amount they can qualify for. This incentive is shared equity in the home and would have to be paid back upon a sale.
Key qualifying factors include less than 20% down (insured purchases only) and owner-occupied properties only.
The government website link with more information and calculators can be found here.