FIRST-TIME HOME BUYER MORTGAGES
Buying your first home is an exciting milestone, but understanding mortgage qualification, down payment requirements, closing costs, and available programs can feel overwhelming.Whether you are ready to purchase now or still building your down payment, early mortgage planning can help you understand your options, strengthen your financial profile, and prepare for homeownership.The first step is often understanding where you stand today and what you may need to do next.
MORTGAGE PRE-APPROVAL
A mortgage pre-approval provides an estimate of how much you may qualify to borrow based on your income, credit, down payment, debts, and other financial information.
Knowing your potential purchasing range can help you search for a home with greater confidence and make more informed financial decisions.
Some lenders may also provide a rate hold for a limited period while you search for a property, subject to lender terms and qualification requirements.
SAVING FOR YOUR FIRST HOME
Two registered savings programs can help eligible first-time home buyers save for or access funds toward a down payment.
FIRST HOME SAVINGS ACCOUNT (FHSA)
Eligible first-time home buyers can use an FHSA to save toward the purchase of a qualifying first home.
The account provides up to $8,000 of participation room in the first year it is opened, with a $40,000 lifetime limit. Contributions are generally tax-deductible, while qualifying withdrawals for a first home are tax-free. Unused participation room may also be carried forward, subject to applicable limits.
HOME BUYERS' PLAN (HBP)
Eligible home buyers may withdraw up to $60,000 from their RRSPs to help purchase or build a qualifying home.
An HBP withdrawal can also be combined with a qualifying FHSA withdrawal for the same home, provided the applicable requirements are met.
Withdrawn amounts are generally repaid to the RRSP over 15 years. Under the current temporary repayment relief, individuals making their first HBP withdrawal between 2026 and 2028 begin required repayments in the fifth year following the year of their first withdrawal.
MORTGAGE OPTIONS FOR FIRST-TIME HOME BUYERS
Recent mortgage rule changes have expanded financing options available to some first-time home buyers.
INSURED MORTGAGES UP TO THE $1.5 MILLION PRICE CAP
The federal insured-mortgage price cap increased from $1 million to
$1.5 million effective December 15, 2024.
This allows eligible buyers purchasing higher-priced homes to access mortgage default insurance with a down payment of less than 20%, subject to applicable qualification, down payment, insurer, and lender requirements.
Mortgage default insurance may provide access to competitive mortgage options while allowing eligible buyers to purchase without a 20% down payment.
30-YEAR AMORTIZATION FOR FIRST-TIME HOME BUYERS
Eligible first-time home buyers may qualify for an insured mortgage with an amortization period of up to 30 years.
A longer amortization can reduce required monthly mortgage payments compared with a shorter amortization, although it may result in more interest being paid over the life of the mortgage.
Qualification remains subject to mortgage insurer and lender requirements.
TAX CREDITS & REBATES FOR FIRST-TIME HOME BUYERS
Eligible home buyers may also benefit from federal and provincial tax credits, rebates, or exemptions that can help reduce some of the costs associated with purchasing a home.
HOME BUYERS' AMOUNT
Eligible first-time home buyers may claim up to $10,000 through the federal Home Buyers' Amount when purchasing a qualifying home.
This is a non-refundable federal tax credit intended to help with some of the costs associated with purchasing a home.
Eligibility and the resulting tax reduction depend on current Canada Revenue Agency requirements and applicable tax rates.
FIRST-TIME HOME BUYERS' GST/HST REBATE
Eligible first-time home buyers purchasing, building, or substantially renovating a qualifying first home may be able to recover some or all of the GST, or the federal portion of the HST, paid on the property.
For eligible new homes valued at $1 million or less, the rebate may provide up to 100% of the GST paid, to a maximum rebate of $50,000.
For eligible homes valued between $1 million and $1.5 million, the maximum rebate is gradually reduced. Homes valued at $1.5 million or more are not eligible for this rebate.
Eligibility is subject to purchase, construction, occupancy, timing, and other Government of Canada requirements.
BC FIRST-TIME HOME BUYERS' PROPERTY TRANSFER TAX EXEMPTION
Eligible first-time home buyers purchasing a qualifying property in British Columbia may receive an exemption from a portion of the Property Transfer Tax.
For qualifying properties with a fair market value of $835,000 or less, an exemption of up to $8,000 may be available. For properties valued above $835,000 and below $860,000, the exemption is gradually reduced.
Eligibility also depends on the buyer, property, residency, occupancy, and other requirements established by the Province of British Columbia.
Because program requirements and thresholds can change, current eligibility should always be confirmed before purchasing a property.
PLAN YOUR FIRST HOME PURCHASE
Buying your first home involves more than finding a mortgage rate. Your down payment, income, credit profile, existing debts, property type, closing costs, and long-term financial goals can all affect the mortgage options available to you.
Rihana Peiman can help first-time home buyers in British Columbia review mortgage options, understand the financing process, and prepare for their first home purchase.