Changes coming to the First Time Home-buyers Incentive (FTHBI) in 2021

Since it was launched in 2019, the FTHBI has struggled to gain traction among first-time buyers. As of Sept. 30, 2020, the Canada Mortgage and Housing Corporation (CMHC), which administers the program, said it has received just 9,520 applications worth about $173 million in shared equity mortgages. When the program was first announced, the government earmarked $1.25 billion over three years with the goal of assisting 100,000 homebuyers to purchase homes.


Under the program, the government provides first-time buyers with an interest-free down payment loan of up to 5% for resale purchases, and 10% if the property is a new build. The CMHC then participates in any rise or fall in value of the home, and the loan must be repaid either when the house is sold or within 25 years.


So what are they changing?


New changes were first announced in September 2019, but are now expected to come into effect in spring 2021, the government said.

Here’s an overview of the changes:

  • First-time buyers will be able to purchase a home up to 4.5 times their household income (currently 4 times their income maximum)


  • They can participate if their household income is $150,000 or less (currently $120,000)


  • With a minimum down payment, the maximum purchase price that will qualify under the program rises to about $722,000 in those three markets (currently approx. $505,000 currently nationwide)


When these changes were first proposed over a year ago, the government said it would help an additional 20,000 Canadians benefit from the shared-equity program. From our persepective we expect to see more clients in the GTA qualify for the program.


Again, these changes will not be in effect until spring 2021.

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