Buying your first home is exciting — but for many Canadians, the mortgage process is the most confusing and stressful part.
This guide is here to change that.

We’ll cover:

• How first-time buyer mortgages work

• Special programs designed to save you money

• Insider tips to get approved and avoid costly mistakes

1. How First-Time Buyer Mortgages Work

A mortgage is a loan that covers the gap between your down payment and the price of your home.

For example:
If you buy a home for $550,000 and put down $35,000, your mortgage covers the remaining $515,000 — plus interest over time.

Your monthly payment includes:

• Principal — the amount you borrowed

• Interest — cost of borrowing

• Property Taxes (sometimes included)

• Mortgage Insurance (if applicable)

2. Minimum Down Payment Rules for First-Time Buyers

Canada’s minimum down payment rules:

• Homes up to $500,000 → 5% down

• Homes $500,000–$999,999 → 5% on first $500K + 10% on remainder

• Homes $1M+ → 20% down

Example:
$700,000 home → $25,000 (5%) on first $500K + $20,000 (10%) on remainder = $45,000 total

3. Mortgage Default Insurance (CMHC, Sagen, Canada Guaranty)

If you put down less than 20%, you must pay mortgage default insurance.

• Premium: 2.8%–4% of your mortgage amount

• Added to your mortgage so you don’t pay upfront

Why it exists: It protects lenders if you can’t repay, and lets you buy with a smaller down payment.

4. Government Programs for First-Time Buyers (2025)

First Home Savings Account (FHSA)

• Save up to $8,000/year, lifetime $40,000

• Tax-free growth + tax deduction on contributions

• Combine with Home Buyers’ Plan for bigger impact

Home Buyers’ Plan (HBP)

• Withdraw up to $60,000 from RRSP without tax

• Must repay over 15 years

First-Time Home Buyer Incentive (status: check 2025 updates)

• Government shares part of your mortgage to lower payments

• Paid back when you sell or refinance

Land Transfer Tax Rebates

• Ontario rebate: Up to $4,000 for first-time buyers

• Some cities (like Toronto) have additional rebates

5. How to Get Mortgage Pre-Approval

Pre-approval gives you:

• A clear budget

• A locked-in rate for 90–120 days

• More credibility with sellers

You’ll need:

• Proof of income (T4s, pay stubs, NOAs)

• Employment verification

• Credit report

• List of assets & debts

6. Choosing the Right Mortgage Type

Fixed Rate — Predictable payments, good for stability.
Variable Rate — Lower initial cost, but can change with prime rate.

Open vs. Closed:

• Open: Pay off anytime without penalty (higher rate)

• Closed: Lower rate but penalties for breaking early

7. First-Time Buyer Mortgage Mistakes to Avoid

• Not saving for closing costs (budget 1.5%–4% of purchase price)

• Focusing only on interest rate (terms matter too)

• Changing jobs before closing (can affect approval)

• Opening new credit accounts during the process

• Skipping professional advice

8. How a Mortgage Broker Helps First-Time Buyers

A broker:

• Shops multiple lenders for the best rate & terms

• Explains mortgage jargon in plain language

• Helps you access first-time buyer programs

• Guides you through every document & deadline

Final Word
Your first mortgage sets the tone for your financial future. With the right strategy and guidance, you can save thousands and enjoy your first home without the stress.

Thinking of buying your first home?
I’ll walk you through the mortgage process step-by-step, compare options from multiple lenders, and make sure you get the best possible start.

📞 Book a Call