The first time home buyer incentive gives you the option of giving the Government of Canada a 5% or 10% stake in your home. In return for that stake in your home, the government will pay 5% or 10% towards your down payment which will reduce your monthly mortgage payment.
Jessica wants to build a new home for $400,000. Using the incentive program, Jessica can receive $40,000 in a shared equity mortgage (10% of the new home purchase price) through the program, on top of the 5% minimum down payment ($20,000) from her own funds.
Utilizing this program would decrease Jessica’s mortgage payment by approximately $180 per month.
If Jessica sells her home for $500,000, she would then have to repay 10% or $50,000 to the program.
If Jessica sells her home for $300,000, she would then have to repay 10% or $30,000 to the program.