Grants And Loans for First-Time Buyers in Toronto & GTA
Saturday Oct 20th, 2018
Buying a home is a significant goal for many Ontarians; but the path to homeownership presents many financial hurdles. Saving a sufficient down payment is tough enough on its own and when coupled with rising interest rates and tough qualification rules – which includes a mortgage stress test– affording a home becomes very difficult for some.
Luckily, there are plenty of grants available to help you out – especially if you’re a first-time homebuyer in Ontario.
There are three types of grants available to Ontarians: Those offered by the federal government, those offered by the provincial government, and those offered at the municipal level.
This is just a place to start; a cheat sheet, if you will. Do yourself a favour and make a list of all the programs you may qualify for and do some further research – it could save you thousands on your first home purchase.
Federal grant programs
CMHC is a Canadian crown corporation and is the largest issuer of mortgage default insurance. Canadians who build or renovate their homes for energy efficiency using CMHC-insured financing can receive up to a 25% rebate on their insurance premium.
This credit allows homebuyers to claim up to $5,000 on the purchase of their home on their personal tax year for the year of purchase. This allows Ontarians to save up to $750 on their taxes for that year.
Genworth is one of Canada’s largest private issuers of mortgage default insurance. Canadians who build a home through one of the insurer’s energy-efficient building programs can receive up to a 25% rebate on their mortgage default insurance.
This rebate gives back up to $1,500 in GST or HST to eligible homeowners.
Perhaps the most popular program is the RRSP homebuyer’s plan. It allows Canadians to withdraw up $25,000 from their RRSP to fund the down payment of a new home. Couples purchasing a home together can access $25,000 each for a total of $50,000.
The money is available tax-free but must be repaid within 15 years. Think of it as a tax- and interest-free loan to yourself.
Provincial grant programs
First-time homebuyers could qualify for a rebate on the first $368,000 of their home purchase for a maximum of $4,000. Keep in mind, though, that couples purchasing a home where one of the partners has previously owned a home will have the amount reduced.
Another part of the Trillium benefit, current homeowners living in Northern Ontario could qualify for a tax break for energy, sales, and property taxes. Individuals may qualify for a total of $151; families could net $232 per year.
As part of the Ontario Trillium benefit, a rebate of up to $1,187 is offered to Canadians for energy costs. Non-seniors are eligible for $1,043, seniors are eligible for the maximum, and those who live on a reserve or in long-term care facilities can receive up to $232.
Municipal grant programs
Peel region: Home in Peel affordable ownership program
Available to Canadian citizens and permanent residents residing in Toronto, this land transfer tax rebate offers up to $4,475 back when used alongside the provincial tax credit.
The prolific developer offers an interest program that allows buyers to lower their mortgage costs. It offers an interest-free 20-year forgiven loan for 10% down payment “boost” to add to a buyer’s 5% down payment.
It also offers capped closing costs, so first-time buyers know exactly what they’ll pay before moving in.
Specifically for low income households, Habitat for Humanity offers capped, no-interest mortgage options.
Be sure to research which programs you qualify for (each has their own unique requirements) and check out a mortgage affordability calculator – which is always a good place to start your homebuying journey.
By RateHub.ca; blog.newinhomes.ca