First-Time Home Buyer Mortgages

The minimum down payment in Canada is 5% of the purchase price for homes up to $500,000. For homes between $500,001 and $999,999, you need 5% on the first $500,000 and 10% on the portion above $500,000. Homes priced at $1,000,000 or more require a minimum 20% down payment. For example, a $600,000 home would require a minimum down payment of $35,000 (5% of $500K plus 10% of $100K).

Yes. You can combine the RRSP Home Buyers' Plan withdrawal ($35,000) with your First Home Savings Account balance (up to $40,000) for a combined total of up to $75,000 per person. For a couple, this means up to $150,000 in tax-advantaged down payment funds. The FHSA withdrawal is completely tax-free and does not need to be repaid, while the RRSP HBP withdrawal must be repaid over 15 years.

CMHC mortgage insurance (also called mortgage default insurance) is required for any purchase with less than 20% down payment. It protects the lender if you default on your mortgage. The premium ranges from 2.80% to 4.00% of the mortgage amount depending on your down payment percentage. While it is an additional cost, insured mortgages typically qualify for the lowest interest rates available, which can offset the insurance premium over the life of the mortgage.

First-time buyers should budget 1.5% to 4% of the purchase price for closing costs on top of the down payment. Key costs include legal fees ($1,500 to $2,500), home inspection ($400 to $600), appraisal ($300 to $500), title insurance ($250 to $400), and land transfer tax (offset by the first-time buyer rebate in Ontario). You will also want to budget for moving costs, immediate home maintenance, and utility setup deposits.

Under the federal RRSP Home Buyers' Plan and First Home Savings Account rules, you qualify as a first-time buyer if you have not owned a home that was your principal residence in Canada or elsewhere in the past four calendar years. However, the Ontario Land Transfer Tax rebate uses a stricter definition, requiring that you have never owned a home anywhere in the world. We help you understand which programs you qualify for based on your specific situation.

The income required depends on the purchase price, your down payment, current interest rates, and your existing debts. As a general guideline, lenders use two debt service ratios. Your Gross Debt Service (GDS) ratio, which includes mortgage payments, property taxes, and heating costs, should not exceed 39% of gross income. Your Total Debt Service (TDS) ratio, which adds all other debt payments, should not exceed 44% of gross income. We calculate your exact purchasing power during the pre-approval process.

Yes. Adding a co-signer (such as a parent or family member) to your mortgage application can help you qualify for a larger amount or secure better terms. The co-signer's income and credit are included in the qualification, strengthening your application. Keep in mind that the co-signer takes on legal responsibility for the mortgage. We can advise on whether a co-signer arrangement makes sense for your situation.