Mortgages for first-time homebuyers
With increasing housing prices and a fast-moving marketplace, getting on the housing ladder these days is no easy task. However, the Government of Canada have created incentives to help get first-time homebuyers on the marketplace much faster and easier. Some of these incentives include:
- Home Buyers Plan. You can now withdraw up to $35,000 from your RRSP and use it towards your down payment. You’ll have 15 years to pay this money back, but it’s interest-free and a great way to increase your down payment and reduce your mortgage default insurance premiums.
- Tax-Free First Home Savings Account. Scheduled to roll out in 2023, the FHSA allows Canadians to contribute up to $8,000 to the account, up to a maximum of $40,000. When the funds are withdrawn for the purpose of buying a home, the earnings in the FHSA (and any withdrawals) are tax-free.
- First-Time Home Buyers (FTHB) tax credit. Claim up to $5,000 in tax credits on costs associated with purchasing your first home. Associated costs might include land transfer tax, legal fees or disbursements.
- GST/HST New Housing Rebate. You can qualify for a rebate to recover part of your GST or HST payments that you paid on the purchase price, on the cost of renovating or adding additions, or on converting a non-residential property into a home.
- First-Time Home Buyer Incentive. Eligible first-time homeowners who have a minimum down payment for an insured mortgage can apply to finance a small portion of their home through a shared equity mortgage with the Government of Canada.