Buying A Home For The First Time?

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Navigating a large purchase can be overwhelming. That’s where we come in. We walk you through each step of the process, working with everyone involved such as the Realtor, Home Inspector and Lawyer. Let us take it off of your plate.

Down Payment

Sources of Down Payment

Accumulating the down payment is the biggest challenge prospective homebuyers face. The down payment can come from several sources. According to the "2021 First-Time Homebuyer Survey & Financial Fitness Study*" performed by Sagen, the most common source for homebuyers ' down payment was their Personal Savings, followed by their RRSP.

The CRA offers a Home Buyers' Plan for those wishing to withdraw from their RRSP. The Home Buyers' Plan is a program that allows you to withdraw from RRSPs to buy or build a qualifying home.

Another common source many homebuyers have availed of are gifted funds from an immediate family member. Each lender will have its own policies surrounding this source of down payment. Alternatively, you can borrow part or all of the down payment. Borrowed down payments are not accepted by all lenders and come with additional qualifying criteria.

Borrowed

Cash Advance from your Line of Credit

Gifted

Gifted funds from immediate family.

RRSP

Investments like RRSP, TFSA.

Savings

Accumulated savings.

First-Time Homebuyers Incentive

The First-Time Homebuyers Incentive (FTHBI) is a federal program offered through the Canadian Mortgage and Housing Corporation (CMHC). It allows qualified first-time homebuyers to reduce their mortgage payment with an interest-free incentive.

Take a look at the following example using the incentive:

Purchase Price $300,000
- Down Payment ($15,000)
- FTHBI ($15,000)
Combined Down Payment ($30,000)
Insurance Premium $11,400

Total Mortgage Amount: $281,400

Monthly Mortgage P&I Payment: $1,317.32

Take a look at the following example not using the incentive:

Purchase Price $300,000
- Down Payment ($15,000)
Insurance Premium $11,400

Total Mortgage Amount: $296,400

Monthly Mortgage P&I Payment: $1,387.54

Homebuyers Plan

The Homebuyers Plan is a federal government program offered through the CRA.

This will allow you to make a withdrawal from your registered retirement savings plan (RRSP) without paying taxes at the time of withdrawal. The maximum you can withdraw is $35,000

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