- You can buy with as little as 5% down on the first $500,000.
- The FHSA and RRSP Home Buyers’ Plan can be used together toward the same home.
- Insured first-time buyers can choose an amortization of up to 30 years.
1. Work out your minimum down payment
In Canada you need 5% of the first $500,000 of the purchase price and 10% of the portion between $500,000 and $1.5 million. Homes at $1.5 million or more require 20% down. With less than 20% down, you’ll pay a mortgage default insurance premium, which is added to your mortgage.
2. Use the FHSA and Home Buyers’ Plan
The First Home Savings Account lets you contribute up to $8,000 a year, to a $40,000 lifetime limit. Contributions are tax-deductible and qualifying withdrawals are tax-free. The RRSP Home Buyers’ Plan lets you withdraw up to $60,000 from your RRSP, repaid over 15 years. You can use both toward the same purchase.
3. Understand the stress test
Lenders must check that you could afford your payments at a higher rate: the greater of 5.25% or your contract rate plus 2%. This is often what sets your maximum budget, so get pre-approved before you start viewing homes.
4. Consider a 30-year amortization
First-time buyers with an insured mortgage can amortize over up to 30 years. Your monthly payment drops, but you’ll pay more interest overall. An agent can show you both scenarios side by side.
5. Budget for closing costs
Plan for roughly 1.5% to 4% of the purchase price on top of your down payment: land transfer tax (with first-time buyer rebates in some provinces), legal fees, a home inspection, title insurance and moving costs.
This guide is general information, not financial advice. Rules and programs change; an independent, licensed mortgage agent can confirm what applies to you.