PEI's Down Payment Assistance Program offers eligible first-time buyers a loan of up to 5% of a home's purchase price, to a maximum of $17,500. The home must cost $350,000 or less. The assistance must be repaid, and qualifying for the program does not replace mortgage approval. 1, 2
If the monthly mortgage payment looks manageable but saving the down payment is holding up your purchase, this program may be worth checking. Its eligibility rules cover both the buyer and the property, so the home you choose matters too.
Who qualifies for PEI down payment assistance?
Applicants must be Canadian citizens or permanent residents who meet the program's first-time buyer definition and cannot provide the 5% down payment without assistance. They must have satisfactory credit and no defaulted debt in PEI's Central Default Registry. Household income must be $110,000 or less per year. 1, 2
The first-time buyer definition includes never having purchased a home, not occupying a home owned by you or your current spouse or common-law partner in the last four years, or a marriage or common-law relationship breakdown. Finance PEI determines eligibility. 1
How much assistance could you receive?
The potential loan is calculated from the purchase price, so a less expensive home has a smaller maximum loan. These examples apply the program's 5% formula and assume the applicant and property qualify.
| Purchase price | Potential assistance |
|---|---|
| $250,000 | $12,500 |
| $300,000 | $15,000 |
| $350,000 | $17,500 |
These amounts are examples, rather than approvals or cash grants. A home priced above $350,000 falls outside this program's purchase-price limit. 1
What does conditionally interest-free mean?
The loan carries 5% interest per year that accumulates during its term, but that interest is forgiven when the principal is satisfactorily repaid in full. If the borrower defaults, the unpaid principal and accumulated interest become due. The principal is the amount borrowed. 3
Repayment runs over ten years, with an option to delay payments for the first year. A registered second collateral mortgage secures Finance PEI's loan against the home, alongside the first mortgage. 3
Can you use the program for a rental property or cottage?
The property must be your owner-occupied, single-family principal residence on PEI, with no portion rented out. Rental properties and seasonal or recreational homes are excluded. 3
Do you still need savings and mortgage approval?
The program requires you to qualify for a default-insured first mortgage from a recognized financial institution. Default insurance protects the mortgage lender if you cannot repay the mortgage. It does not protect the borrower. 2, 4
The assistance covers only the down payment, so closing costs need a separate budget. Review both loan payments before deciding what purchase price is comfortable. 3
How do you apply for PEI down payment assistance?
Begin the application by asking Finance PEI to determine your eligibility. Successful applicants receive a program pre-approval letter before arranging the insured first mortgage and finding a home. The financing commitment is finalized after an agreement of purchase and sale. 3
Prepare the previous tax year's Notice of Assessment for each applicant, the required government identification, and written employment verification. Finalizing the financing also requires the mortgage approval and purchase agreement. Submit personal documents through the official application process. 1
Your spouse or common-law partner is expected to be a co-applicant on the assistance loan, even if they are not an applicant on the first mortgage. Applications are accepted until March 31, 2031, or until the program's funding is committed, whichever happens first. 2
Where can you check the current rules and discuss your mortgage?
Finance PEI's official program page and fact sheet explain the current eligibility and loan conditions. The details above were checked against those sources on October 6, 2026.
- Read the official program details
- Read the Finance PEI fact sheet
- Start the official online application
For help reviewing the mortgage side of a PEI purchase, contact BRX Mortgage Team East. Finance PEI decides whether you qualify for the assistance program; the mortgage lender decides whether to approve the mortgage.