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Ottawa’s New first-time home buyer incentive program is open

UPDATE: As of March 31, 2024, the First-Time Home Buyer Incentive will be discontinued. Read our post “Federal government cancels the First Time Home Buyer Incentive” to find out more.

Ottawa has introduced a new program meant to help first-time home buyers break into the housing market, which has become increasingly difficult as property costs skyrocketed over the last decade in Canada’s major cities.

This federal program, called the First-Time Home Buyer Incentive (FTHBI) officially opened on September 2nd and will be most useful in smaller cities and less expensive markets.

Ottawa essentially lends first-time, lower income home buyers money toward their down payment, and instead of getting interest, they get a share of the equity when the homeowners sell. Buyers get a smaller monthly mortgage payment and have a few options on how to pay it back: in 25 years when the mortgage matures, when they sell the home, or as a lump sum anytime before.

Essentially, the federal government is offering a second mortgage to Canadians. But it’s unclear why the government seeks to add to these debt levels considering Canadian debt levels are at a historic high already, and mostly due to mortgages. On the other hand, the program signals Ottawa’s confidence that the housing market will continue to appreciate and that property remains a good investment.

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At the same time, the program has serious limitations, mostly because the purchase price is capped at $505,000 (for a household earning the maximum $120,000 and with a 5% down payment saved) — which entirely leaves out first time home buyers looking at Vancouver real estate and Toronto homes for sale. Sold prices in Toronto and Vancouver were, for example, $806,755, and $967,314 in July, respectively.

The criteria for the program is that at least one person in the household must be a first time home buyer, the buyers must have already saved at least 5% down and their combined household income must be less than $120,000.The buyers’ Mortgage-to-Income Ratio also may not be more than four times their income.

This criteria leaves a relatively narrow segment of the population to benefit from this program. But Zoocasa has determined that residents in at least 19 major markets of the country are likely to qualify. They based this study on average home prices in 25 of Canada’s largest markes. Ontario real estate tends to be expensive, and the program’s cap leaves out Hamilton and Kitchener. But Ottawa, London, Windsor and Sudbury all have the average price of homes under $500,000.

Most prairie and maritime cities also qualify, along with Montreal, long a bastion of affordable, urban homes.

To see the full list of qualifying cities, check out the infographic below:


Zoocasa is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings at or download our free iOS app.