🏡 First Time Home Buyers Guide

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

1. Know Your Budget

Before you start house hunting, understand how much you can realistically afford. Lenders look at your income, expenses, credit, and down payment to determine how big a mortgage you can qualify for.

2. Get Pre-Approved

A mortgage pre-approval shows sellers you’re serious and helps you lock in a rate while you shop. It also gives you a clear price range for your home search.

🏦 Mortgage Brokers vs. Banks

  • Banks only offer their own mortgage products and appointments can be slower.

  • Mortgage brokers compare multiple lenders and products to find options tailored to you — often more quickly and with better choice. We can not only make sure you are getting the best rate across multiple lenders, but also a product and plan made for you.

💰 Down Payments

Minimum Down Payment Rules

  • 5% of the first $500,000 of your purchase price.

  • 10% of any amount above $500,000.

  • You do not need 20% down to buy your first home. If your down payment is less than 20%, you will likely need mortgage default insurance.

Where Your Down Payment Can Come From

  • Savings

  • Gifts from family

  • Investments

  • Home Buyers’ Plan (HBP) — RRSP withdrawal (see below)

  • First Home Savings Account (FHSA) savings (see below)

📈 The Mortgage Qualification Rules

Stress Test

Most Canadian buyers must qualify at a mortgage qualifying rate that’s higher than their contract rate to ensure they could afford payments if rates rise.

Amortization

For insured mortgages (less than 20% down), the maximum amortization is generally 25 years. However, first-time buyers purchasing a newly-built home may qualify for 30-year amortization under recent federal changes aimed at reducing monthly payments.

📊 Programs & Tax-Advantaged Savings

🟩 RRSP — Home Buyers’ Plan (HBP)

You can withdraw up to $60,000 per person from your RRSP without immediate tax to buy or build your first home. A couple could potentially withdraw up to $120,000 combined.

Key points:

  • Funds must have been in your RRSP at least 90 days before withdrawal.

  • You usually have up to 15 years to repay the amount back into your RRSP.

  • You must qualify as a first-time buyer under CRA rules — generally meaning you haven’t lived in a home you owned in the past four years.

🟩 FHSA — First Home Savings Account

The First Home Savings Account (FHSA) lets Canadians save up to $40,000 per person for a first home with tax-deductible contributions and tax-free withdrawals for qualifying purchases.

Benefits:

  • Contributions reduce your taxable income.

  • Withdrawals for first home purchase are tax-free.

  • You can combine FHSA and RRSP (HBP) benefits together.

🧾 Costs to Budget For

In addition to your down payment:

Property Transfer Tax / Land Transfer Tax

• In British Columbia, first-time buyers may be eligible for a Property Transfer Tax exemption or rebate depending on purchase price and eligibility.
• Other provinces, like Ontario, offer land transfer tax rebates — for example, up to several thousand dollars depending on province and municipality.

This tax is typically due at closing but rebates can reduce your cost significantly.

Other Costs

  • Legal/Notary Fees — budgeting roughly $1,500–$2,500.

  • Home Inspection — usually $300–$600.

  • Appraisal — $300–$500 (depending on lender).

  • Mortgage Default Insurance (if <20% down) — premium depends on loan-to-value ratio.

💸 First-Time Home Buyer Tax Benefits

Home Buyers’ Tax Credit (HBTC)

Eligible first-time buyers can claim a federal tax credit that can reduce your income tax owing — currently up to about $1,500 (note: this figure can change with tax law adjustments).

GST/HST New Housing Rebate

If you’re buying a new home from a builder, you may be eligible for a GST/HST rebate on part of the tax paid — worth potentially thousands depending on home price and province.

🏁 Summary Checklist Before You Buy

✔ Check your financial readiness (budget & credit score)
✔ Save for down payment + closing costs
✔ Get a mortgage pre-approval
✔ Maximize tax-advantaged savings (FHSA + HBP)
✔ Understand your ongoing homeownership costs
✔ Work with a broker and real estate agent to find the right home