First-Time Homebuyer Incentive Calculator 2020

Flag of CanadaCanada’s most comprehensive calculator for first-time buyers

There are three main incentive programs for first-time home buyers. Each program has different requirements to qualify as a first-time buyer. See the FAQ below for details.

  • Land transfer tax rebates, which refund some or all of the land transfer tax levied as part of your closing costs.
  • The Government of Canada First-Time Home Buyer Incentive, which allows 5% or 10% of your home to be purchased (shared-equity) by the government. This amount must be repaid, interest-free, within 25 years or if the house is sold.
  • The Home Buyers’ Plan, which allows you to withdraw up to $35,000 (since March 19, 2019) from your registered retirement savings plan (RRSP) tax-free. The amount must be repaid over a 15-year period.

You can find information about the other programs and incentives with our guide on Incentives for First-Time Home Buyers in Canada.

Purchase Pricehelp

The purchase price of your home.

$ 500,000

Down Paymenthelp

The amount paid upfront. In Canada, the minimum down payment is 5%. Mortgage default insurance (commonly referred to as CMHC insurance) is required for down payments under 20%.

10% = $50,000

Province

ON

City

Toronto

Property Type

Existing/ResaleNew Construction

Annual Household Income

$ 120,000

We need your income to determine your eligibility for the Government Shared-Equity Incentive.

Land Transfer Tax Rebate$8,475.008.48k
+Government Shared-Equity Incentive$25,000.0025k
=Total Incentive$33,475.0033k
Save over $10,000 on your mortgage.
2.79%*5-Year Fixed

Lower than the Major Banks

* For mortgages of at least $500,000 with down payment under 20%.
Rates provided by Mortgauge Corporation. WOWA assumes no liability for the accuracy of information presented.
† For mortgages of at least $500,000 over a 25-year amortization period.

Mortgage Mini-Calculator

Interest Ratehelp

The annual interest rate on the mortgage loan amount. A lower interest rate can drastically reduce your mortgage payments.

3.00 %

Our Rate (5 Yr. fixed)

2.79%*Get This Low Rate

0%10%

Goverment Incentive Option

close
None
5
%
$25,00025k
10
%
Ineligible
Your Monthly Payment
$2,1962.20k
/month
Down Payment
(Incl. Incentive)
$50,00050k
Mortgage Amount
(Incl. CMHC Premium)
$463,950464k

Government Shared-Equity Incentive

The government of Canada offers a First-Time Home Buyer Incentive program. Under the program, you can apply for a 5% or 10% shared-equity mortgage with the Government of Canada, reducing your mortgage payments. Essentially, the government will help you purchase 5% or 10% of your home, to be paid back at a later date.

Based on the information you have provided, you are eligible to apply for 5% of your purchase price in shared equity. This works out to a maximum of $25,00025k in government incentives.

Frequently Asked Questions

Am I eligible for the program?

The program is only available for CMHC-insured mortgages. Therefore, you are automatically ineligible if

  • your purchase price is $600,000 or above, or
  • your down payment is at least 20% of your purchase price.

To qualify for a government shared-equity incentive,

  • you must be a citizen or permanent resident of Canada,
  • you or your partner must be a first-time home-buyer (see ‘Am I a first-time home-buyer?’ below), and
  • your annual household income cannot exceed $120,000.

Even if you satisfy these criteria, there are limits on how much you can borrow depending on your annual household income. See ‘What is the borrowing limit, and how does it work?’ below. Other criteria may apply in special situations.

Am I a first-time home-buyer?

You qualify as a first-time home-buyer if

  • you have never purchased a home,
  • you have gone through a breakdown of marriage or common-law partnership, or
  • in the last four years, you have not occupied a home owned by you or your partner.

You only need to satisfy at least one of the above criteria to qualify. Only one spouse/common-law partner needs to meet the above requirements to qualify.

How long does the program last?

The program launched September 2, 2019, and will end either:

  • after three years (September 2, 2022), or
  • when a total of $1.25 billion of incentives have been granted,

whichever occurs sooner. Many experts expect the funding to go quickly, so it may be prudent to act as soon as possible.

How much do I qualify for?

  • For existing, resale, or mobile/manufactured homes, you can apply for a 5% shared-equity incentive.
  • For newly constructed homes, you have the option of applying for a 5% or a 10% shared-equity incentive.

Borrowing limits may apply in both of these cases. See ‘What is the borrowing limit, and how does it work?’ below.

What is the borrowing limit, and how does it work?

Your borrowing limit is four times your annual household income. Your total borrowing amount (mortgage principal + shared-equity incentive) cannot exceed this limit. The CMHC mortgage insurance premium does not count towards the limit.

No partial incentives are given. The only options are 5% and 10% shared-equity.

How much do I need to pay back?

The amount you owe depends on the future fair-market value of your property at the time of repayment. You will need pay 5% or 10% of the future property value, depending on which incentive program you applied for. No interest is charged in either case.

When do I need to pay back the incentive?

You must pay back the incentive within 25 years or if the property is sold, whichever occurs first. You must pay the amount in full.

There are no prepayment fees or penalties for an early payment. If you believe your property value will rise in the future, paying early may lower your payment amount.

I am buying a mobile or manufactured home. Am I eligible?

Yes. However, you can only apply for the 5% shared-equity incentive option, even if the home is new.

Examples

John and his wife want to buy a newly constructed home for $400,000. They would qualify for 10% of the purchase price, or $40,000, under the shared-equity incentive program.

At a 3% interest rate, this would lower their monthly payment from $1,870 to $1,673, saving them nearly $200 per month, or $60,000, over the lifetime of the mortgage.*

Assuming they make the minimum 5% ($20,000) down payment, John and his wife would need to make between $95,000 and $120,000 in total to qualify.

*Assuming a 5-year fixed term with 25-year amortization and 5% down payment.

Marissa makes $80,000 a year, and has $60,000 saved up for a down payment.. To qualify for the shared-equity incentive, she can purchase a home worth up to $380,000.

She buys a resale condo for $360,000. Marissa is eligible for $18,000 from the Government of Canada First-Time Home Buyer Incentive, allowing her to take out a mortgage of only $282,000 plus insurance.

Land Transfer Tax Rebate

When you acquire a property (and the land it rests on), you must pay a land transfer tax to the government after the transaction closes. As a first-time home buyer, you are eligible for land transfer tax rebates, often worth thousands. A detailed breakdown of your land transfer tax costs and savings is below.

Provincial$6,475.00
+Municipal$6,475.00
Rebate$8,475.00
=Total Tax$4,475.00

Detailed Breakdown

Ontario Land Transfer Tax

Ontario levies a land transfer tax by applying a tax-bracket system to your property’s purchase price. The full breakdown of your provincial land transfer tax is shown below.

Tax BracketMarginal Tax RateMarginal Purchase PriceMarginal Tax
First $55,00055k0.5%×$55,00055k=$275275
$55,00055k to $250,000250k1.0%×$195,000195k=$1,9501.95k
$250,000250k to $400,000400k1.5%×$150,000150k=$2,2502.25k
$400,000400k to $2,000,0002.00m2.0%×$100,000100k=$2,0002.00k
Over $2,000,0002.00m2.5%×$00=$00
Total Tax$6,4756.48k

Starting January 1, 2017, Ontario offers a land transfer tax refund of up to $4,000 for first-time home buyers. Since your provincial tax exceeds the rebate limit, your provincial rebate is capped at $4,000.

Toronto Land Transfer Tax

Toronto levies an additional land transfer tax equal in value to the Ontario land transfer tax. You will also need to pay an administration fee of $75 + HST.

Toronto offers a land transfer tax refund of up to $4,475 for first-time home buyers. Since your municipal tax exceeds the rebate limit, your municipal rebate is capped at $4,475.

Frequently Asked Questions

Note: The following land transfer tax FAQ applies to Ontario only.

Am I a first-time home-buyer?

To qualify as a first-time home buyer, you must meet all of the following criteria:

  • You must be at least 18 years of age.
  • You must be a Canadian citizen or permanent resident.
  • You must occupy the property as your principal residence within nine months of purchase.
  • You cannot have owned a home, anywhere in the world, at any time.
  • Your spouse/common-law partner cannot have owned a home while they were your partner.

How do I claim a rebate?

You may obtain an immediate refund at the time of registration.

  • If you are registering electronically, you must fill Statement 9028 and 9029 under the Explanation tab of the land transfer tax section.
  • If you are filing on paper, you must submit an Ontario Land Transfer Tax Refund Affadavit at the Land Registry Office.

I did not claim a rebate at the time of registration. Am I still eligible?

Yes, if you act quickly. You may claim your rebate at any point within 18 months of purchase.

Can I get a rebate if I am not a citizen or permanent resident of Canada?

Yes, in certain cases. After the purchase of a property, you have an 18-month window following registration to obtain a rebate. If you gain citizenship or permanent residency during this period, you can claim the full rebate amount.

What is land speculation tax?

The Non-Resident Speculation Tax (NRST), also known as land speculation tax, is a 15% tax on residential property in areas near Toronto.

The tax only applies to individuals who are not citizens or permanent residents of Canada. The specific region involved is known as the Greater Golden Horseshoe region, shown below.

For more information, visit the official government website.

RRSP Home Buyers’ Plan

Since March 19, 2019 (as part of Budget 2019), the Home Buyers’ Plan will allow first-time home buyers to withdraw up to $35,000 tax-free from their registered retirement savings plan (RRSP) to buy or build a home. The amount must be repaid over a period of 15 years.

This is a recent increase over the current limit of $25,000, to take effect after the approval of Budget 2019.

Do I qualify for the Home Buyers’ Plan?

You must meet the following criteria to qualify for the Home Buyers’ Plan:

  • You must be a resident of Canada at the time of withdrawal.
  • You must be the owner of the RRSP(s) from which the withdrawals are made.
  • Your RRSP contributions must have stayed in the RRSP for at least 90 days before withdrawal.
  • Neither you nor your spouse/common-law partner can have owned the relevant home for more than 30 days.
  • Neither you nor your spouse/common-law partner can have owned another home in the last four years.

If you have a disability, the last requirement is waived. Additional requirements may apply in special cases.

Is the withdrawal limit per person or per household?

The withdrawal limit is per-person. Each spouse/common-law partner has their own, separate withdrawal limit. If you are married or in a common-law relationship, you can therefore withdraw a total of $70,000.

Note that only the person registered as the owner of an RRSP can withdraw from it under the program. Each spouse will need to have their own RRSP account to take advantage of the increased limit.

How do I make a withdrawal?

You must submit a Form T1036 to your financial institution for each withdrawal you wish to make.

How many withdrawals can I make?

You can make an unlimited number of withdrawals within one calendar year up to a total of $35,000. Withdrawals made during January of the following year are also tax-exempt.

When do I need to repay my withdrawals?

You have up to 15 years to repay the amount withdrawn to your RRSP. Repayments start the calendar year after the withdrawal is made. Each year, the Canada Revenue Agency (CRA) will send you a Home Buyers’ Plan statement of account listing your remaining balance and minimum payment.

If you make more than your minimum payment, your later minimum payments will be reduced. You may repay the full loan amount at any time without penalty.

How do I make a repayment?

To make a repayment under the Home Buyers’ Plan (HBP), you need to make a contribution to your RRSP and designate a portion of the contribution as an HBP repayment. You may make this designation on line 246 of Schedule 7 when filing your next tax return.

Examples

Jessica and her husband want to buy a home in Toronto for $900,000, but only have $80,000 saved for a down payment. Assuming an interest rate of 3%, their monthly payment would normally be $4,036 per month.*

Jessica and her husband each withdraw $35,000 from their own RRSP account. In total, they make a down payment of $150,000, lowering their monthly mortgage payment to $3,649. That’s a savings of $387 per month, or $116,000 over the lifetime of their mortgage.

To repay the loan, they will need to make an annual payment of $4,667 for 15 years. No interest or tax is charged on the RRSP withdrawal.

*Assuming a 5-year fixed term with 25-year amortization.

Nathan purchased a home five years ago with the help of the RRSP Home Buyers’ Plan. He withdrew the maximum of $35,000, and has made the minimum $2,333 annual payment each year.

This year, however, Nathan can only afford to make a payment of $1,000. The missing $1,333 is filed as taxable income on his next return. Since his remaining balance is now larger than planned, his minimum payment increases to $2,481 starting next year. No other fees or penalties are charged.

Other First-Time Home Buyer Incentives and Programs

There are many programs that help first-time home buyers in Canada with many provinces and territories offering their own incentives. You can find out more about your available options with our guide to First-Time Home Buyer Incentive Programs in Canada.

This calculator is provided for general information purposes only. WOWA does not guarantee the accuracy of information shown, and is not responsible for any consequences of the use of the calculator.
* Rates shown are on approved credit and subject to change without notice.