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Helping You Secure Your Financial Future —
Mortgages, Investments & Insurance Tailored to You
"Where TRUST Grows, Business Begins – RP"
What You Need to Know as a First- Time Home Buyer
FIRST-TIME HOME BUYER INCENTIVE
The First-Time Home Buyer Incentive is a government-backed shared equity mortgage program designed to help eligible Canadians reduce their monthly mortgage payments without increasing their debt load. Offered by the Government of Canada through CMHC (Canada Mortgage and Housing Corporation), this incentive provides 5% or 10% of the home's purchase price toward your down payment, effectively lowering your mortgage amount and making homeownership more affordable.
The government shares in the appreciation or depreciation of your property’s value, with a maximum gain or loss capped at 8% per year (not compounded) based on the incentive amount, from the date of funding to the time of repayment.
Key Eligibility Criteria:
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Must be a first-time homebuyer
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Household income must be $120,000 or less
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The mortgage plus incentive cannot exceed 4 times the qualifying income
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The home must be used as your primary residence
This incentive is ideal for new buyers in Canada who need extra support to enter the housing market with reduced monthly payments and greater long-term affordability.
MORTGAGE PRE-APPROVAL
Mortgage pre-approval is a crucial first step in the home-buying journey. It helps you determine your true affordability by assessing your income, existing debts, credit score, and monthly expenses. A pre-approval provides a realistic estimate of how much you can borrow, giving you a clear price range when shopping for a home.
Getting pre-approved also strengthens your buying position, showing sellers and real estate agents that you’re a serious, qualified buyer. In Canada, most lenders offer pre-approvals that lock in an interest rate for up to 120 days, protecting you from potential rate hikes while you search for your dream home.
NEW INSURED MORTGAGE CAP INCREASES TO $1.5 MILLION –
EFFECTIVE DECEMBER 15, 2024
As of December 15, 2024, the insured mortgage limit in Canada has officially increased to $1.5 million, marking the first adjustment since 2012. This change benefits homebuyers with less than a 20% down payment, allowing them to qualify for mortgage default insurance on higher-value homes.
With real estate prices continuing to rise in 2025, especially in major markets like Vancouver and Toronto, this update makes insured mortgages more accessible for middle-income Canadians. The new cap helps buyers enter the housing market with lower down payments, while still enjoying competitive interest rates and lender flexibility associated with insured mortgages.
HOME SAVINGS ACCOUNT (FHSA) – A TAX-FREE WAY TO SAVE FOR
YOUR FIRST HOME
Launched in January 2023, the First Home Savings Account (FHSA) is a powerful, tax-advantaged savings vehicle designed specifically to help first-time homebuyers in Canada reach their down payment goals faster. This registered account combines the best features of an RRSP and a TFSA—you receive tax deductions on your contributions (like an RRSP), and your savings and investment growth are tax-free upon withdrawal (like a TFSA), as long as the funds are used to purchase your first qualifying home.
The FHSA allows eligible Canadians to contribute up to $8,000 per year, with a lifetime contribution limit of $40,000. Contributions reduce your taxable income, and withdrawals used for a qualifying home purchase are completely tax-free, making it one of the most effective tools for building a home down payment.
30-YEAR MORTGAGE AMORTIZATION FOR FIRST-TIME HOMEBUYERS AND NEW BUILDS – NOW
As of December 15, 2024, the Government of Canada has expanded eligibility for 30-year mortgage amortizations to include all first-time homebuyers and all buyers of newly constructed homes, including condominiums. This major policy shift is designed to reduce monthly mortgage payments, making homeownership more accessible in today’s high-cost housing environment.
By allowing longer amortization periods, the government is lowering the monthly financial burden for qualified buyers, giving them more breathing room in their budgets—especially in cities with higher home prices like Vancouver and Toronto.
This builds upon the earlier measure from Budget 2024, which took effect on August 1, 2024, permitting 30-year amortizations specifically for first-time homebuyers purchasing new builds. The extended policy now goes further, encouraging more Canadians to purchase newly constructed homes, while supporting the broader goal of stimulating housing supply and addressing the national housing shortage.
HOME BUYER's PLAN
Under the Home Buyers' Plan (HBP), eligible Canadians can withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to use as a down payment on their first home—tax-free, as long as the funds are repaid within 15 years. If you’re buying with a spouse or partner, each of you can withdraw up to $35,000, allowing for a combined total of $70,000 toward your home purchase, provided both individuals meet the program’s criteria.
FIRST-TIME HOME BUYERS' TAX CREDIT
The Government of Canada has increased the amount used to calculate the Home Buyers’ Tax Credit (HBTC) to $10,000, offering a non-refundable tax credit of up to $1,500 for eligible first-time homebuyers. This credit helps reduce the income tax you owe in the year you purchase your first home, easing the financial pressure that often comes with closing costs and moving expenses.
To qualify, you must be a first-time homebuyer who has purchased a qualifying home (such as a detached house, townhouse, condo, or mobile home) in Canada. The HBTC can be claimed on your personal income tax return for the tax year in which the property was purchased.
This is a valuable financial incentive designed to support new homeowners as they take their first step onto the property ladder.
NO STRESS TEST WHEN SWITCHING LENDERS AT RENEWAL – MORE FLEXIBILITY FOR CANADIAN HOMEOWNERS
Starting November 21, 2024 for uninsured mortgage holders, and December 15, 2024 for those with insured mortgages, the Government of Canada has removed the requirement to undergo the mortgage stress test when switching lenders at renewal. This major change allows homeowners to shop for better mortgage rates and more competitive terms without needing to requalify based on income or debt ratios.
By eliminating the stress test at renewal, this policy enhances mortgage portability, increases lender competition, and gives more Canadians the freedom to negotiate better deals, especially in a rising interest rate environment. It’s a significant step toward greater affordability and flexibility, empowering homeowners to take control of their financial future.
GST/HST NEW HOUSING REBATE – SAVE THOUSANDS WHEN BUYING OR RENOVATING YOUR HOME
The GST/HST New Housing Rebate can significantly reduce the amount of Goods and Services Tax (GST) or Harmonized Sales Tax (HST) you pay when purchasing a newly built home or substantially renovating an existing one. According to the Government of Canada, eligible homebuyers may recover a portion of the GST or the federal part of the HST paid on a home intended to be their primary residence (or that of an immediate family member), provided all eligibility requirements are met.
In addition to the federal rebate, provincial housing rebates may also be available—regardless of whether you qualify for the federal portion. These can help reduce the provincial part of the HST, depending on where you live.
In British Columbia (BC), the maximum federal GST rebate is $6,300.
This rebate is especially valuable for first-time buyers, homeowners undertaking major renovations, or those buying from builders. Understanding your eligibility and applying correctly can lead to thousands of dollars in tax savings.
LAND TRANSFER TAX REBATES FOR FIRST-TIME HOME BUYERS – SAVE ON CLOSING COSTS
Many Canadian provinces, including British Columbia, offer land transfer tax rebates to help first-time home buyers reduce the upfront costs associated with purchasing a home. These rebates can significantly lower or even eliminate the amount of Property Transfer Tax (PTT) you need to pay at closing.
In BC:
To qualify for a full exemption, the property must:
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Be a residential property, and
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Have a purchase price of $835,000 or less.
If the purchase price is between $835,000 and $1,000,000, you may still qualify for a partial exemption, depending on the price and other eligibility criteria.
This rebate is a valuable financial incentive for new buyers looking to enter the housing market in BC. Taking advantage of it can help you lower your closing costs and make homeownership more accessible.