First-Time Homebuyer Incentives in Canada: What's Available in 2025?

Buying your first home is a big step, but it can also feel overwhelming, especially regarding affordability and saving for a down payment.

Fortunately, Canada offers several programs that help first-time homebuyers. These programs can make the process easier by reducing some of the costs of buying a home.

If you plan to buy in 2025, understanding the available incentives can help you save money and secure the right mortgage.

Why do First-Time Homebuyers Struggle with Affordability and Down Payments?

One of the biggest challenges for first-time buyers is saving enough money for the down payment.

In Canada, most homebuyers must put down at least 5% of the home's purchase price. For example, if you want to buy a $400,000 house, you'll need to save at least $20,000 for the down payment.

In addition to the down payment, there are other costs, like closing fees, legal fees, and home inspections. 

When you add everything up, it can feel like a lot of money to come up with—especially if you're just starting your career or haven't been able to save much.

But don't worry—plenty of government programs and lender incentives can help make buying your first home more affordable.

Can Government Programs and Lender Incentives Help Reduce Costs?

Canada's government and many lenders offer various programs and incentives specifically designed for first-time homebuyers.

These programs can reduce the amount you need to save, lower your mortgage payments, or give you access to better rates. Let's look at some of the most essential incentives available in 2025.

What is the Government Incentives Program for the First-Time Home Buyer?

1. First-Time Home Buyer Incentive (FTHBI)

The FTHBI program helps first-time buyers by offering shared equity financing. This means that the government will lend you up to 10% of the home's purchase price for a newly built home or 5% for an existing home. This money reduces your mortgage, which can help lower your monthly payments.

For example, if you buy a home for $400,000, you could get a loan of $40,000 for a new home or $20,000 for an existing home. 

You won't need to repay this loan right away, and the government shares in the home's future sale value. This can make it easier to qualify for a mortgage, as your payments will be smaller.

2. RRSP Home Buyers' Plan

Another helpful program is the RRSP Home Buyers' Plan. This plan allows you to withdraw up to $35,000 from your RRSP (Registered Retirement Savings Plan) to put toward purchasing your first home.

The best part is that you don't have to pay tax on this withdrawal if you repay the money to your RRSP within 15 years.

If you're buying with a partner, you can withdraw up to $35,000 from your RRSPs, potentially accessing $70,000 for your down payment. This is a great way to boost your savings if you've contributed to your RRSP.

Know Provincial Grants and Tax Rebates Available in 2025

In addition to federal programs, many provinces offer incentives for first-time homebuyers. These can vary depending on where you live, but here are some common ones that could be available in 2025

:

1. Ontario First-Time Home Buyer's Tax Credit

If you're buying your first home in Ontario, you can qualify for a tax credit of up to $4,000. This tax credit helps cover some of the costs of buying your home, such as closing fees and land transfer taxes.

2. British Columbia First-Time Home Buyer Program

In British Columbia, you can take advantage of the First-Time Home Buyer Program, which offers rebates on land transfer taxes. This rebate can save you thousands of dollars, making homeownership more affordable.

3. Nova Scotia First-Time Home Buyers' Rebate

In Nova Scotia, first-time buyers can qualify for a rebate on their land transfer tax. This rebate helps reduce the money you must pay when purchasing a home, lowering your upfront costs.

Each province has different programs, so it's essential to research what's available in your area. These provincial programs can significantly affect how much you pay for your home.

How to Maximize Savings and Get the Best Mortgage Deal?

To make the most of these incentives, here are a few tips to help you save and get the best mortgage deal possible:

1. Save for a Larger Down Payment

The more money you spend on your home, the less you'll need to borrow. If you can save more than the minimum down payment, you'll reduce the interest you'll pay over time. It also increases your chances of qualifying for a mortgage with better terms.

2. Shop Around for the Best Mortgage Rate

Not all lenders offer the same mortgage rates. Take the time to compare different lenders to find the best rate for you. Even a slight difference in interest rates can save you a lot of money over the life of your mortgage.

3. Take Advantage of Government Programs

Don't forget to apply for government programs like the FTHBI and RRSP Home Buyers' Plan. These can significantly reduce the amount you need to borrow and make homeownership more affordable.

4. Get Pre-Approved for a Mortgage

Before you start shopping for a home, get pre-approved for a mortgage. This will give you a clear idea of how much you can afford to borrow and help you narrow down your options. It can also make the buying process quicker and smoother.

How First-Time Buyers Secured Financing with LendingHub?

Many first-time homebuyers have successfully secured financing and purchased their homes with the help of LendingHub.

LendingHub connects buyers with experienced mortgage experts who can guide them through the application process and help them find the best mortgage terms.

Additionally, they used the RRSP Home Buyers' Plan to boost their down payment and secure a mortgage with a great interest rate.

We helped them understand all the available programs and worked with them to make their dream of homeownership a reality.

With proper support and guidance, many first-time buyers successfully navigate the mortgage process and achieve their goals.