The timing trap
Erin, who works at the University of Alberta, had been toying with the idea of buying her first home. She was 32, and very aware that the Edmonton market was heating up. 'I figured if I was going to buy a house, I'd better do it sooner rather than later because prices just kept going up,' she says.
But she had only $7,000 in savings. The dilemma: wait and save more for a house that would cost more in a year, or use every dollar now and have nothing left for a rainy day.
Then a friend showed her a way out. The friend had just bought using the First-Time Home Buyer Incentive program — a shared-equity program that gives first-time buyers money toward their down payment.
How the program works
Erin applied. The program provides an additional 5% (for existing homes) or 10% (for new construction) on top of what you've already saved. That extra chunk helps lower your monthly payment, cuts your mortgage insurance premium, and makes it easier to qualify in the first place.
Erin had a decent credit score, met the income limit, and had 5% from her own funds. She qualified.
Because she planned to buy an existing home, she received an additional 5% toward her down payment. There are no monthly payments tied to that help — as long as she doesn't sell or refinance. She'll pay back the incentive when she sells or after 25 years, whichever comes first.
Finding the place
Once Erin knew she had the extra help, she started hunting in earnest. She found a 1-bedroom, 1-bath condo for $125,000. The additional down payment assistance — $6,250 — meant she could close the deal in 2021 without wiping out her savings.
'And I didn't have to use all my savings!' Erin says. She's also built equity over the past couple of years as home values climbed and she's paid down the mortgage.
Beyond the numbers, she's enjoying the space. 'I've got so much more room for my money than when I was renting,' she says. 'And I like being a permanent part of the neighbourhood and getting to know my neighbours.'
What this means for you
If you're sitting on a small down payment and worried that waiting will price you out, programs like the First-Time Home Buyer Incentive can help you move now without emptying your emergency fund. Check whether you meet the income and credit criteria, then run the numbers with someone who knows how these programs stack with your mortgage. The goal is to buy smart, not just fast.
