First Time Home Buyer?
Buying your first home is exciting — but it can also feel overwhelming. We’re here to help, and honestly the best thing for us to do is jump on a phone call, but in the mean time this guide breaks down the key steps, programs, and costs to help you confidently plan your first purchase.
Getting Started
5 Things to Consider
Employment History
Your lenders will want to see consistent income history.
What this looks like for you might depend on whether you are self-employed or a T4 employee, but our team can work through all of this with you.
Credit Score 680+
A credit score of 680 or higher is going to get you the best rates. 600-679 you will be eligible for alternative options.
Under 600 is going to need to be worked on before applying.
Your Debt Servicing Ratios
Your Debt Service ratios determine how much you can borrow.
You will need a total debt service ratio of under 44 %. (Monthly debts including future mortgage payment must stay under 44% of gross monthly income.)
You will need a Gross Debt Service ratio under 39%. (Housing costs alone (mortgage + tax + heat + 50% condo fees) under 39% of gross monthly income.)
Down Payment Ready to Roll?
When it comes to down payments, the amounts vary depending on the price of the property. For homes $500K or less, the minimum down payment is 5%. Properties between $500K and $1.5M require 10%, while homes $1.5M or more require a minimum of 20%.
Down payments can come from your savings, an inheritance, or even a gift. For first-time buyers in Canada, you can also withdraw up to $60,000 from your RRSP through the Home Buyers’ Plan (HBP) to put toward your down payment. If you’re buying with a partner who also qualifies, you could access up to $120,000 combined.
The FHSA is a registered plan designed to help first-time buyers save for a down payment. Contributions are tax-deductible like a RRSP. Withdrawals for a qualifying home purchase are tax-free like a TFSA. You can combine this with the Home Buyers Plan. Annual contribution limit for a FHSA is $8,000 with a lifetime limit of $40,000.
Emergency Fund
Saved separately from your down payment, you should have 3-6 months of expenses in the bank..
You don't want to empty your safety net to buy a home.