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Save thousands through Canada Mortgage and Housing Corporation’s (CMHC) First Time Home Buyer Incentive! Here’s an example using a $350,000 mortgage. See the potential savings from the Shared Equity Mortgage (SEM) Incentive.
| Item | Mortgage with SEM | Mortgage without SEM |
|---|---|---|
| CMHC Insurance | $9,675 | $13,300 |
| Mortgage Amount (minus down payment & insurance) | $324,765 | $345,800 |
| Monthly Payment | $1,540 | $1,639 |
Total savings in 1 year: $1,188
Total savings in 5 years: $5,940
Get your first home faster by seeing what we’ll need to help you. Here’s our mortgage application checklist.
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What are the eligibility requirements to apply for a mortgage?
Let's see some 20/20 pay down examples!
20% monthly payment increase
Let's say you have the following mortgage:
- Mortgage: $200,000
- Rate: 4.69%
- 25 year amortization
- Monthly payment= $1,128.17
You can increase your monthly payments by 20%.
$1,128.17 x 20%= $225.63
This means your maximum monthly payment could be $1,353.80. ($1,128.17 + $225.63).
If you pay $1,353.80/month, your mortgage length changes from 25 years to 18.3 years!
20% original principal pay down
Let's keep the same mortgage details.
You can put up to $40,000 extra on your mortgage per year ($200,000 x 20% = $40,000) over the course of your mortgage without penalty. This would also change your mortgage length from 25 years to 17.17 years!
See our mortgage prepayment calculator to enter your own pay down scenarios.
If you'd like to take advantage of our 20/20 option, contact us today!
More information
- Available for personal use: principal residence, secondary residence, cabin, cottage, condo, non-revenue property
- Conventional and Canada Mortgage and Housing Corporation (CMHC) approved
- Interest compounded annually
- Term lengths 1 ,2, 3, 4, 5, 7 and 10 years
- See current rates
- All payment frequencies available
- Prepayment options
- You can prepay up to 20% of the original amount of the mortgage during each 12-month period from the anniversary date. This privilege is not cumulative from year to year and does not apply if you wish to prepay the mortgage in full, renegotiate the rate, or prepay more than 20%.
- If you wish to prepay in full, renegotiate, or prepay more than 20%, you'll pay the greater of:
- 90 days’ interest or the interest difference of the current posted rate of a similar mortgage type with an equal term.
- Innovation will allow 20% prepayment without penalty at the time of payout providing funds are not coming from another financial institution and the prepayment privilege has not been utilized since the anniversary date. (Mortgage schedules allow for the collection of the additional 20% penalty. The privilege is subject to change.)
- Payment increase
- During each term, you may increase the regular payment by a cumulative maximum increase of 20%
- If the regular payment has increased, you may decrease the payment to an amount not less than original payment set at the beginning of the term
- Property sold
- If the property is sold during the mortgage term, the penalty may be waived subject to you obtaining an Innovation mortgage of equal or greater value and selecting a minimum 1- year term.
- If the new mortgage is approved within 6 months from the date of payout of the previous mortgage, the penalty can be refunded upon disbursal of the new mortgage proceeds.
- Convertible and buy down options/consolidations:
- Pay the greater of 75% of:
- 90 days’ interest or
- the interest difference of the current posted rate of a similar mortgage type with an equal term.
- May select any Personal Closed Mortgage product.
- For consolidations, the above penalties shall apply or a blended rate as approved by our Retail Team.
- Pay the greater of 75% of:
- Early renewal
- 6-month option to early renew
- Current expiry must be within 6 months or less
- Applicable application fees
- Available for personal use: principal residence, secondary residence, cabin or cottage
- Conventional and CMHC approved
- Interest compounded annually
- Term length 5 years
- See current rates
- Blended repayment terms
- All payment frequencies available
- CMHC Blended 5-year term
- Non-blended repayment terms
- On demand, lump sum – due in 1 year or less
- Interest only option available only for a construction mortgage
- Prepayment options
- Prepay the whole or any part of the principal amount outstanding without penalty, unless payment is received directly or indirectly from another lender or financial institution. If that is the case, you shall pay a 90-day interest penalty.
- No penalty charged if the property is sold
- Convertible and buy down options/consolidations:
- Upon payment of a $100 conversion fee you may select any Closed Fixed Residential Mortgage product
- Applicable application fees
- Available for personal use: principal residence, secondary residence, cabin, cottage, condo, nonrevenue property
- Conventional and CMHC approved
- Interest compounded annually
- Term length 1 year
- See current rates
- Blended repayment terms
- All payment frequencies available
- Non-blended repayment terms
- On demand, lump sum – due in 1 year or less
- Interest only option not available
- Unlimited prepayment
- No penalty charged if the property is sold
- Convertible and buy down options/consolidations
- Upon payment of a $100 conversion fee, you may select any Personal Mortgage product
- Applicable application fees
- Available for personal use: principal residence, secondary residence, cabin, cottage, condo, nonrevenue property
- Conventional and CMHC approved
- Interest floating – semi-annual equivalent rate calculation
- Term length 5 year
- See current rates
- Blended repayment terms
- All payment frequencies available
- Non-blended repayment terms
- On demand, lump sum – due in 1 year or less
- Interest only option not available
- Unlimited prepayment
- No penalty charged if the property is sold
- Convertible and buy down options/consolidations
- Upon payment of a $100 conversion fee, you may select any Personal Mortgage product
- Applicable application fees
Questions
Checklist - When applying for a mortgage, we'll need some documents and information. Here’s our mortgage application checklist.
Residential Mortgage Security - When you borrow money to buy a house, we require security in the form of real property.
Mortgage Default Insurance - As per Legislation, we can only lend up to 80% of the purchase price or value of your new home. If you have less than 20% for a down payment, you'll need mortgage default insurance (pdf).
A protection plan provides peace of mind for you and your loved ones. During a tough time, you can focus on your family. We'll focus on protecting you from financial loss.
With an insured mortgage, if you are unable to make your mortgage payments, CUMIS, our reputable insurance company, will make the payments for you. You can apply for a variety of insurance types for your mortgage: disability, life, loss of employment, or critical illness. So, for example, if you lost your job and had loss of employment insurance on your mortgage, CUMIS would make your mortgage payments until you found a job again (up to maximum time noted in your policy). You wouldn’t have to worry about losing your home during such a difficult time.
Need more help choosing your mortgage?
Try our mortgage selection tool!
Learn more about your mortgage options on the Financial Consumer Agency of Canada's (FCAC) website.
The team at Innovation is here to help make things a little easier for you. You can count on informed advice and information about unique benefits available to you as a first-time home buyer. Guidance throughout the process can help you make informed decisions and realize your goal of home ownership.
That includes everything from the first-time buyer mortgage calculator found above to conversations with your mortgage specialist that address your needs for first mortgage financing. We’re also happy to share information about programs designed to help you lower the upfront cost of your mortgage, making it easier to buy a home.
Take Advantage of the First-Time Home Buyer Incentive for Your First Mortgage Loan
The high cost of real estate and many other economic factors can make it difficult to purchase a home. For first-time home buyers in particular, it may feel like having enough for a down payment is just out of reach or that the projected monthly payment is a little too high.
You can use mortgage incentives for first-time buyers to make your first home purchase a little more affordable. The Canada Mortgage and Housing Corporation provides a first-time home buyer incentive for exactly that purpose.
The Government of Canada will enter into a shared-equity mortgage with you, providing 5% of the purchase cost of an existing home, or 5% or 10% of the cost of a new home. This loan must be repaid in 25 years or when the house is sold, but does not require regular payments or accrue interest.
That means you can make a larger down payment, cut down on the size of your first-time home buyer mortgage, and reduce your monthly loan payment!
A New Incentive: The First-Time Home Buyer Savings Account
While it won’t be officially introduced until 2023, the First Home Savings Account (FHSA) is another money-saving option for first-time buyers.
Because contributions aren’t taxed and withdrawals used to purchase a home aren’t either, you can save more money for your down payment! We’ll share more information as this account becomes available.
First-Time Home Buyer Mortgage Rates
Looking for our mortgage interest rates? Visit our dedicated rate page to see all of our available interest rates.
AIR = Annual Interest Rate
APR = Annual Percentage Rate
Annual Interest Rate = The total cost of credit expressed as an annual percentage, not including various non-interest charges.
Annual Percentage Rate = The total cost of credit expressed as an annual percentage, taking into account, both interest and various non-interest charges.
If there are no non-interest finance charges, the AIR and APR will be the same.
APR Assumptions:
a. $300,000 Mortgage
b. 25 Year Amortization
c. Applicable Term for Each
d. $400 Appraisal Fee
Applicable to residential mortgages only and subject to Innovation Credit Union lending criteria for residential properties. Some conditions apply.
Interest rate compounded semi-annually not in advance. Interest rates are subject to change without notice.Applicable to residential mortgages only and subject to Credit Union lending criteria for residential properties. Some conditions apply.
Rates subject to change without notice.
Innovation Credit Union will lend for properties located in Canada only.
Additional information for building mortgages could be required depending on the type of construction project you are undertaking.