Ontario First Time Homebuyer Programs A Complete Guide for 2025

Buying your first home is an exciting yet challenging journey, especially in Ontario’s competitive housing market. High home prices, down payments, and mortgage approvals can be overwhelming. Fortunately, Ontario first time homebuyer programs offer tax rebates, down payment assistance, and government-backed mortgage incentives to make homeownership more affordable. Understanding these programs can help first-time buyers in Ontario save thousands of dollars and secure the best financial support when purchasing their first home.

First Time Home Buyer Incentive in Ontario for Lower Mortgage Costs

The First-Time Home Buyer Incentive (FTHBI) is a government-backed shared-equity program designed to reduce mortgage payments. The program provides an interest-free loan covering 5% or 10% of the home’s purchase price in exchange for a proportional share of ownership.

How the First Time Home Buyer Incentive Works

• Buyers of resale homes can receive 5% of the purchase price from the government.
• Buyers of newly built homes can receive 5% or 10% of the purchase price.
• This incentive lowers monthly mortgage payments without increasing debt burden.
• The loan must be repaid within 25 years or when the home is sold.
• Repayment is based on the home’s market value at the time of sale rather than the original loan amount.

For example, if you purchase a home for $500,000 and receive a 10% shared-equity loan ($50,000), you must repay 10% of the sale price when selling the home. If the home later sells for $600,000, you repay $60,000 instead of the initial $50,000.

Learn more about repayment details on the official Government of Canada FTHBI page.

If you are looking for additional ways to reduce your mortgage costs, check out our guide on the best mortgage options in Ontario.

Home Buyers Plan in Ontario Helps First Time Buyers with Down Payment

Saving for a down payment is one of the biggest obstacles for first-time buyers. The Home Buyers’ Plan (HBP) allows eligible buyers to withdraw up to $35,000 from their RRSP tax-free to help cover their down payment. Couples buying together can withdraw $70,000 combined, making this an excellent tool for increasing purchasing power.

How the Home Buyers Plan Works

• Buyers must be first-time homebuyers or have not owned a home in the last four years.
• The withdrawn amount must be repaid within 15 years to avoid penalties.
• Repayments begin two years after withdrawal.
• Funds can be used for a down payment or closing costs.

To maximize your savings, check out our first-time mortgage guide.

Ontario Land Transfer Tax Rebate for First Time Home Buyers

When purchasing a home in Ontario, buyers are required to pay land transfer tax (LTT), which can add thousands of dollars in costs. The Ontario Land Transfer Tax Rebate provides first-time homebuyers with a rebate of up to $4,000, significantly reducing closing expenses.

Eligibility for Land Transfer Tax Rebate

• Must be purchasing a home in Ontario.
• Must be a first-time homebuyer (or your spouse/common-law partner must not have owned property before).
• The home must be intended as a primary residence.

For example, on a $500,000 home, the land transfer tax is approximately $6,475. First-time buyers receive the maximum $4,000 rebate, reducing their total tax to $2,475.

Wondering where to buy? Check out our list of the best cities to buy real estate in Ontario.”

First Time Home Buyers Tax Credit in Ontario Helps Reduce Tax Burden

The First-Time Home Buyers’ Tax Credit (HBTC) allows buyers to claim a 15% tax credit on up to $10,000 of eligible home purchase costs, providing a maximum $1,500 tax savings.

Who Qualifies for the First Time Home Buyers Tax Credit?

• Must be a first-time homebuyer in Canada.
• The home must be used as a primary residence.
• The tax credit must be claimed in the same tax year as the purchase.

While this tax credit doesn’t provide direct cash, it helps reduce your income tax liability, making homeownership more affordable.

Ontario Affordable Home Ownership Program for Down Payment Assistance

The Ontario Affordable Home Ownership Program provides interest-free loans to first-time buyers to assist with down payments. Each municipality sets its own income limits and eligibility criteria.

How the Affordable Home Ownership Program Works

• Buyers receive an interest-free loan for a portion of the down payment.
• The loan is forgivable if the buyer remains in the home for 20 years.
• Income limits and eligibility vary by city and region.

How to Choose the Best First Time Homebuyer Program in Ontario

When selecting an Ontario first time homebuyer program, consider the following:

• Down Payment Assistance – Programs like the HBP and Ontario Affordable Home Ownership Program reduce upfront costs.
• Tax Rebates & Credits – The Land Transfer Tax Rebate and HBTC help lower expenses.
• Mortgage Incentives – The First-Time Home Buyer Incentive reduces monthly payments.
• Repayment Terms – Understand loan repayment conditions before applying.

Final Thoughts on Ontario First Time Homebuyer Programs

Owning a home in Ontario is a major financial decision, but these first-time homebuyer programs provide much-needed support through tax rebates, down payment assistance, and mortgage incentives. With the right financial tools and resources, buying your first home is more achievable than ever.

Get Expert Help for First Time Homebuyer Programs in Ontario

Are you ready to buy your first home in Ontario? Speak with a mortgage expert today to find out which Ontario first time homebuyer programs you qualify for and make homeownership a reality.

Buying your first home is a significant milestone, and navigating Ontario’s real estate market can be challenging. With expert guidance, the right mortgage solutions, and access to Ontario first-time homebuyer programs, you can secure the best deal and save thousands of dollars.

Harv Singh, a trusted Realtor in Ontario, is here to help you every step of the way. Whether you need assistance understanding your mortgage options, finding a home within your budget, or maximizing first-time homebuyer incentives, Harv provides personalized advice tailored to your needs.

Ready to make homeownership a reality? Contact Harv Singh today to explore your best options and take the next step toward buying your dream home in Ontario!