First Time Buyers

First-Time Homebuyers

A home is one of the biggest purchases of your life and you have a lot of questions about the home buying process. The amount of information in the marketplace can seem overwhelming. Here are a few of the questions we can help you answer:
  • Can I qualify for a mortgage and how much can I borrow? See Mortgage Qualifier
  • Where can I get the best mortgage rates? 
  • What mortgage term is right for me?
  • What other costs and taxes should I expect?
  • Can I use my RRSP funds for a down payment?
  • What do I need to know about payment options, mortgage portability and other conditions.
  • Are there government programs that can assist me?

first home savings accountFirst time Homebuyers Savings Account

Starting in April 2023, Canadians can save up to $40,000 for their first home. If eligible, you can make tax deductible contributions of up to $8,000 each year AND you will have up to 15 years to use your savings toward your home purchase. Funds will accumulate tax-free, provide a tax deduction in the year of contribution and are withdrawn tax-free so long as the funds are used toward home purchase.

Who is eligible?  
There are three important components to qualify:
• You need to be a resident of Canada
• You must be at least 18 years of age (or the age of majority in your region)
• You can't own a home in the year the account is opened or previous four years. You are considered a first-time homebuyer, for the purposes of this plan, if you haven’t owned a home within the last four calendar years. For example, if you bought your first home in 2015 and sold it in 2018 and have been renting or living with parents or a non-spouse ever since, you would be considered a first-time homebuyer again.

What happens if you don't use your tax-free home savings?

Right now, you can withdraw up to $35,000 of your RRSP towards a new home (called the RRSP Home Buyer's Plan) tax free. The catch is that with the RRSP Home Buyers Program, you are borrowing from your RRSP and must replace your RRSP funds within 15 years. With the new FHSA, you won't need to replace those funds. As long as you qualify for both programs, you can withdraw from both your FHSA and your RRSP to help purchase your first home. 

First Time Homebuyers Tax Credit 

A tax credit available for qualified 'first' home purchases. Even if you've owned a home before, you may be able to claim up to $10,000 for the purchase of a qualifying home in the year if both of the following apply:

•       you (or your spouse or common-law partner) acquired a qualifying home

•       you did not live in another home owned by you (or your spouse or common-law partner) in the tax year or in any of the four prior years.
The home must be registered in your and/or your spouse's or common-law partner's name. The program is a non-refundable tax credit, so the rebate is equal to the base federal rate of 15% of the $10,000 claim = $1500 tax savings.
Enter $10,000 on line 31270 of your return if you are not splitting the amount with your spouse or common-law partner. You and your spouse or common-law partner can split the claim but the combined total cannot be more than $10,000 and should generally be claimed by the higher income earner.

Property Transfer Tax Exemptions

As a first time home buyer in BC, there are opportunities available only to you that are unavailable to repeat purchasers.  The Province of BC offers Property Purchase Tax exemptions for first time buyers of qualifying properties.  BC Property Transfer Tax Exemption Details.

RRSP Home Buyers Plan

The Canadian Government also encourages home ownership through a RRSP withdrawal program to help first-time buyers access down payment funds.  Canada RRSP Home Buyers Plan Details.

What is a High-Ratio Mortgage?

Whenever the down payment is lower than 20%, lenders are required to insure the mortgage against default. This default insurance is typically provided by by CMHC or Genworth Financial Canada. The insurance premium is a one time amount charged to the borrower and is normally added into the mortgage payment. Because the risk to the lender increases as the down payment gets smaller, the insurance percentage gets larger accordingly.

Our sub-mortgage brokers can guide you through the available programs that best suit your needs. To find a sub-mortgage broker, click Our Sub-Mortgage Brokers or Contact Us for more information.

I can guide you through the available programs that best suit your needs. Contact me for more information.

See mortgage FAQs for more details on what to expect from the time you come to me for Mortgage Pre-Approval to the time you take possession of your new home.