British Columbia's government wants to help first-time homebuyers get into the market by offering interest-free and payment-free loans for the first five years.
Premier Christy Clark says the government will provide first-time homebuyers with a 25-year loan for a down payment on a home to a maximum of $37,500, as long as the funds have been matched by buyers.
The program applies to homes with a maximum value of $750,000 and the interest-free portion of the loan will last for the first five years, with the repayment schedule at current interest rates over the remaining 20 years.
Clark said most people can remember how difficult it was to put together the money for a down payment on their first home.
"People need a partner in scraping together that first down payment," she said Thursday.
She said the program is aimed at helping middle-class workers own a home.
"A home is a place where you live and raise your family and start your life," she said.
The program will start accepting applications online next month.
To be eligible, first-time buyers must be pre-approved for an insured high-ratio mortgage for at least 80 per cent of the home's purchase price.
The announcement comes as housing costs in the province have ballooned, especially in Metro Vancouver where the average price on a single-family home in some neighbourhoods reached $2 million.