First Time Home Buyer
Buying Your First Home Effortlessly.
Let's Get You The Best First Time Home Buyer Mortgage!
Home Buying Journey for First Time Home Buyers
1
Down
Payment
Save up for at least 5% down payment for homes <$1Million or 20% for homes >$1 Million
2
Know How Much
You Can Afford
Calculate how much you can afford using our Mortgage Affordability Calculator
3
Get
Pre-Approved
Get Pre-approved so that you can house hunt with confidence! Talk to us today to hold your rate!
First Time Home Buyer Incentives
Let these government incentives help you open the door towards home ownership and save big!
interest-free Shared-Equity Mortgage
- This is a government incentive that allows First Time Home Buyers to get an interest free loan. 5% of home value for resales, and up to 10% for new construction.
- You are not required to make any payments until you sell your property, but you can buy the "government" out at any time.
Land Transfer Tax Rebate
- First Time Home Buyers can get up to $8,475 rebate on land transfer tax in Ontario. Calculate your saving now!
Home Buyer's Plan (HBP)
- First Time Home Buyers can draw up to $70,000 tax-free money from your RRSP per couple ($35,000 per person and if you are single).
- This will not impact your RRSP contribution room as long as you repay the amount in 15 years.
Get Pre-Approved Today
How to Get Pre-Approved For A Mortgage?
Find out how much you may be pre-approved for →
Down Payment
- As a first time home buyer, you need at least 5% of down payment.
- If your down payment is < 20%, you will need to purchase a mortgage insurance. It costs between 2.8%-4% of the property value.
- Down payment can either be from your savings or a gift from family.
- If you are not sure how much you need, just ask us!
Credit Score
- Generally speaking, you can qualify for a mortgage with any credit score. However, the lower your credit score, the higher is your interest rate.
- If you have <20% down payment, the minimum score required is 680.
- 580 - 600 is usually the minimum credit score required by banks. Anything below that will require a Bad Credit Mortgage.
Income & Expenses
- In general, your total monthly debt payments and home related costs (including the mortgage), should be less than 42-44% of your monthly household income.
- Debt includes credit cards, car loans, student loans, etc.
- Home related costs include property taxes, heating, and condo fees (if applicable).
Mortgage Calculators for First Time Home Buyers
We Can Help You Get The Best First Time Home Buyer Mortgage
Finance your first home is stressful, but it doesn't have to be
when you choose us!
Effortless Mortgage
- Lowest rates because we are direct-to-consumer
- Shop the best mortgage from 30+ lenders
- Transparent with no hidden fees
- Fast approval and always get back to you ASAP
Banks and Other Mortgage Brokers
- Higher rates and limited product options
- Only send your deal to 1 to 3 lenders
- Does not tell you everything up front
- Takes days or weeks. May turn you down last minute
A
CHAT
First Time Home Buyer FAQ's
See the top questions other First
Time Home Buyers are asking
As a First Time Home Buyer, how much mortgage can I afford?
The answer is, it depends. It depends on your down payment, income, credit score and other debts. You can use this calculator to get an estimate of how much mortgage you can afford.
Assume you have good credit and not a lot of debt, you may be able to borrow between 4 to 5 times of your annual income. For example, if your household income is $80,000 per year, you should be able to borrow around $320,000 to $400,000 in mortgage amount.
To get to the home price you can afford, simply add down payment amount on top. Based on this example, if your down payment is $100,000, you can purchase a home between $420,000 to $500,000.
Don't forget to factor in the closing costs in your budget.
What are the Canadian First Time Home Buyer Incentives?
There are 3 major government First Time Home Buyer Incentives. When used together, they can result in $20,000+ savings for some First Time Home Buyers:
- Interest-free Shared Equity Mortgage. It allows you to get an equity loan from the government up to 5% to 10% of the home value
- Land Transfer Tax Rebate. You can get up to $4,000 in the Rest of Ontario (up to $8,475, if buying in the City of Toronto) rebate on your land transfer tax at closing.
- Home Buyer's Plan. You can take $35,000 out tax-free RRSP funds for your home purchase.
Learn more about these incentives in this article. When you apply with us, our experienced mortgage advisors can also guide you step-by-step on how to take advantage of these incentives.
How much down payment do I need?
- As a First Time Home Buyer, you need as little as 5% down payment. At 5% down, you need to purchase CMHC Mortgage Default Insurance.
- If you have more than 20% down payment, CMHC Mortgage Default Insurance is not required.
- These are a few First Time Home Buyer government incentives that can help you with your down payment.
- Keep in mind down payment has to come from your own savings or gifts from immediate family members. Family gifts may not be applicable for investment properties.
What credit score does a First Time Home Buyer need?
- If you have less than 20% down payment, your credit score has to be at least 600. If you are applying with your partner, at least one of you should have a credit score greater than 600.
- If you have at least 20% down payment, your credit score can be slightly lower than 600. However, if it's lower than 580, you may qualify but the interest rate is likely to be higher.
How much is the monthly payment on a $400,000 mortgage?
- It's ~ $1,800 assuming 2.5% interest rate and 25 year amortization.
- It's ~ $1,500 assuming 2.5% interest rate and 30 year amortization.
You can get an estimate of your monthly payment using the Mortgage Payment Calculator
Does a First Time Home Buyer have to buy CMHC Insurance?
It depends on how much down payment you have. If you have at least 20% down payment, no CMHC Mortgage Default Insurance is needed.
If you have less than 20% of down payment, you have to purchase Mortgage Default Insurance. Below is the cost of the CMHC insurance premium based on your down payment:
| Down Payment % | Insurance Premium on Mortgage Amount |
|---|---|
| 5% <= Down Payment < 10% | 4% |
| 10%<= Down Payment < 15% | 3.1% |
| 15%<= Down Payment < 20% | 2.8% |
Why should I get pre-approved?
- To estimate the maximum home value you can afford
- To lock in an interest rate for up to 120 days. If rates go up, you are protected
- To know the other conditions in order to get a full approval. This helps you to plan ahead
A pre-approval is a conditional commitment that provides an estimate of how much mortgage you can afford. Here are a few key reasons why it's important to get pre-approved as a First Time Home Buyer:
When to get pre-approved?
The best time to get pre-approved is before you start house hunting, so you get an idea of how much you can afford. Get pre-approved during the planning stage of your home buying journey allows you to "know your limit" when you bid on a house. The last thing you want is to put a firm offer on a house and find out you can't get approved on financing later on. Get pre-approved today to avoid any surprises.
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