7 Best First Time Home Buyer Mortgage Programs in Canada (2026 Guide)

Buying your first home in Canada just got a major overhaul. Here is the ultimate guide to the best mortgage programs and incentives saving Canadians thousands in 2026.

For years, the narrative around buying a first home in Canada has been one of struggle: rising interest rates, impossible stress tests, and down payments that seem to outpace savings. But as we settle into 2026, the script has flipped significantly.

The federal government has rolled out the most aggressive set of housing reforms in decades. With the discontinuation of the complicated Shared Equity Incentive and the introduction of massive new tax breaks and amortization rules, the toolbox for first-time buyers is more powerful than ever. Whether you are looking at a condo in Toronto or a detached home in Calgary, understanding these seven programs could be the difference between renting for another year and getting your keys.

1. The First Home Savings Account (FHSA): The "Tax-Free" Powerhouse

If you only use one program on this list, make it this one. Introduced recently, the First Home Savings Account (FHSA) is widely considered the single best savings vehicle ever created for Canadian homebuyers. It combines the best features of an RRSP and a TFSA with zero downsides for prospective buyers.

How it works: You can contribute up to $8,000 per year (up to a lifetime limit of $40,000).
The Benefit: Contributions are tax-deductible (lowering your income tax bill today), and qualifying withdrawals (including all investment growth) are completely tax-free when you buy your home.
Why it wins: Unlike the RRSP Home Buyers' Plan, you never have to pay this money back. If you don't end up buying a home, you can roll the funds into your RRSP without using up your contribution room.

2. The Enhanced Home Buyers' Plan (HBP)

The Home Buyers' Plan has been a staple for decades, but it received a massive upgrade in the 2024 budget that remains crucial for 2026 buyers.

The New Limit: You can now withdraw up to $60,000 from your RRSP tax-free to fund your down payment (up from the previous $35,000).
Couple Power: If you are buying with a partner, you can both utilize this, giving you access to $120,000 in tax-free cash flow from your existing retirement savings.
Repayment Rules: You must repay the funds into your RRSP over 15 years. However, recent changes extended the "grace period" before repayment starts, giving you more breathing room in those expensive first few years of ownership.

3. 30-Year Amortization for All First-Time Buyers

This is the game-changer for monthly affordability. Effective December 15, 2024, the federal government expanded the eligibility for 30-year insured mortgage amortizations.

Old Rule: If you had less than a 20% down payment (an insured mortgage), you were capped at a 25-year amortization. This meant higher monthly payments.
New Rule (2026 Status): All first-time homebuyers—regardless of whether you are buying a newly built home or a resale property—can now qualify for a 30-year amortization.
The Impact: stretching your payments over 30 years instead of 25 can lower your monthly mortgage bill by hundreds of dollars, helping you qualify for a better home or simply easing your monthly budget.

4. The $1.5 Million Insured Mortgage Cap

For buyers in high-cost markets like Vancouver and Toronto, the old "$1 Million Cap" was a massive barrier. If a home cost $1,000,001, you were required to put 20% down (over $200,000 cash). That wall has been torn down.

You can now get an insured mortgage (less than 20% down) on homes up to $1.5 million. This allows you to enter the market with a down payment as low as roughly $125,000 on a $1.5M home, rather than needing $300,000 under the old rules.

5. The First-Time Home Buyers' Tax Credit (HBTC)

Once the dust settles and you have moved in, don't forget to claim your "welcome home" gift from the CRA. The HBTC is a non-refundable tax credit designed to help offset closing costs like legal fees and land transfer taxes.

The Value: You claim $10,000 on your tax return, which results in a tax rebate of $1,500 in your pocket.
Eligibility: You (and your spouse) must have acquired a qualifying home and not lived in another home owned by you or your spouse in the year of acquisition or any of the four preceding years.

6. Provincial & Municipal Land Transfer Tax Rebates

Closing costs can be a shock, but provincial governments offer significant relief. In 2026, the thresholds in British Columbia, specifically, have improved dramatically.

British Columbia: The limit for the full Property Transfer Tax (PTT) exemption for first-time buyers was raised to $835,000 (up from the old $500k limit). This saves BC buyers up to $8,000+ depending on the purchase price. Newly built homes have even higher exemption thresholds (up to $1.1M).
Ontario: First-time buyers receive a Land Transfer Tax rebate of up to $4,000.
Toronto: If you buy in the 416 area code, you get an additional municipal rebate of up to $4,475. This means a Toronto buyer can save a total of $8,475 in land transfer taxes.
Prince Edward Island: PEI offers a rebate of up to $2,000 for eligible first-time buyers.

7. The New GST/HST Housing Rebate (2025/2026 Expansion)

If you are buying a newly built home (pre-construction condo or new subdivision), you likely already know about the standard GST/HST New Housing Rebate. However, recent federal moves have proposed expanding this relief significantly.

New measures (tabled mid-2025) aim to provide a 100% GST rebate on the federal portion of the tax for new homes valued up to $1 million, with partial rebates available for homes up to $1.5 million. This is a massive improvement over the old, stagnant thresholds that had eroded due to inflation. Always check with your lawyer or developer to see if this improved rebate applies to your specific closing date.

What About the "First-Time Home Buyer Incentive" (FTHBI)?

You may see older articles mentioning a "Shared Equity" program where the government lends you 5% or 10% of the home's value in exchange for equity. This program was discontinued. Applications closed in March 2024. Do not factor this into your planning for 2026.

Conclusion: Which Program Should You Prioritize?

The landscape for 2026 is defined by cash flow and access. The government has moved away from complex equity sharing (FTHBI) and toward enabling you to buy more home with less immediate cash (30-year am, $1.5M cap) while sheltering your savings from taxes (FHSA, HBP).

Your Winning Strategy:
1. Max out your FHSA first (tax-free in, tax-free out).
2. Use the HBP ($60k limit) to top up your down payment if needed.
3. Leverage the 30-year amortization to keep your monthly payments manageable.
4. ensure you apply for all Land Transfer Tax Rebates and the HBTC at tax time.