20 grants and loans for first-time buyers in Ontario
By RateHub.ca on Oct 19, 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.
So, without further ado, we present 20 grants for first-time buyers in Ontario.
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.
First-time homebuyer’s tax credit
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 Canada energy-efficient housing program
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.
RRSP first-time homebuyer’s plan
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 homebuyer land-transfer rebate
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.
Northern Ontario Energy Credit
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.
Ontario energy and property tax credit
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
Brantford: B-Home down payment assistance
Homebuyers may qualify for a 20-year forgivable loan of up to 5% of the purchase price (to a maximum of $16,710).
Dufferin County: Home ownership program
Residents with a gross household income at or below $90,500 could qualify for a loan of up to 10% (to a maximum of $45,000).
Kingston: Home ownership program
Low-income earners could qualify for a 20-year forgivable loan for 5% up to $15,000. 2018 qualification requirements included a household income of $84,800 or less and a home priced less than $300,000. Keep an eye out for 2019 guidelines.
Lanark County: Home ownership program
Aspiring homeowners with a minimum age of 18 and a maximum household income of $87,800 may qualify for a forgivable loan of up to 5% of the purchase price on a home priced less than $301,819.
Muskoka region: Gateway Muskoka
Beautiful cottage country, Muskoka is known for its clear water and forestry. Gateway Muskoka offers down payment assistance loans of up to $20,000 on homes with a maximum purchase price of $335,000.
Peel region: Home in Peel affordable ownership program
Those currently living in Brampton, Mississauga, and the surrounding area may qualify for a 20-year interest-free forgivable loan for up to $20,000 to put toward a down payment.
Simcoe County: Home ownership program funding
Current renters in Barrie and the surrounding area may qualify for a 20-year forgivable loan of 10% for a down payment. The program is only available for homes worth less than $462,645.
A portion of funds is earmarked specifically for those living in social housing or identify as Aboriginal.
Municipal land transfer rebate
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.
Waterloo: Funding to help buy a home
This program is aimed at renters who want to become homeowners; it offers a 5%, interest-free loan to be put toward a down payment and is forgivable, assuming the buyer stays in the home for 20 years.
There are a few qualification requirements, such as a household income of less than $90,500 and a home that costs less than $386,000, among others.
Windsor: Home ownership down payment assistance program
This program offers 10% toward a down payment in the form of a 20-year forgivable loan. Due to such high demand, the program is currently not accepting any new applications. However, keep an eye out in the new year to see if it opens up once again.
Bottom line
If you’re a prospective homebuyer wondering “how much mortgage can I afford?” there are resources available to help you make that major purchase.
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.
