Essential Information for First-Time Home Buyers Key Tips and Insights
A mortgage is a home loan used to purchase property, which is repaid through regular payments that cover both the principal (the borrowed amount) and interest. Over time, these payments reduce your loan balance and help build home equity.
For first-time home buyers, securing a mortgage can be a smart financial move, allowing you to build equity in an asset that appreciates and grows tax-free as a resident. Instead of renting and paying someone else’s mortgage, you’re investing in your future. You can begin with a down payment as low as 5% of the home’s purchase price, but making a larger down payment can help reduce mortgage insurance costs and secure better loan terms.
At MonsterMortgage.ca, we offer expert advice on securing the best mortgage rates and financing options.
Benefits
Professional support at every cornerstoneYou’re Protected
An experienced mortgage professional provides dedicated support throughout the entire home-buying process. From pre-approval to closing, receive consistent, reliable advice and guidance for a smooth, informed journey to homeownership.
Tailored Mortgage Solutions
A variety of mortgage options customized to fit unique needs and financial situations, ensuring the best fit for a first home.
Get the Best Mortgage Rate
A variety of mortgage options customized to fit unique needs and financial situations, ensuring the best fit for a first home.
Maximize Mortgage Approval
A deep understanding of lenders’ unique criteria helps match borrowers with the right mortgage products, enhancing approval chances, even in complex situations.
Available Incentives for First-Time Buyers
There are a number of federal and provincial programs that offer financial support. These include the First-Time Home Buyer Incentive, Home Buyers’ Plan (HBP), and Land Transfer Tax rebates in some provinces.
Want to learn more about these programs? Visit the Government of Canada’s mortgage support page.
Tools to Help You Plan
FAQs
Are you qualified for Canada’s First-Time Home Buyer Incentive?
If your income is $120,000 or less and your total mortgage amount is no more than four times your annual income, you may qualify. Additionally, either you or your spouse/partner must be a first-time home buyer. You must also be a Canadian citizen, permanent resident, or a non-permanent resident with work authorization in Canada.
How does Canada’s First-Time Home Buyer Incentive work?
For eligible first-time home buyers, the Canadian government offers a program designed to reduce monthly mortgage payments without requiring a larger down payment. The government contributes 5% or 10% of the home’s purchase price, depending on the property type. This contribution acts as a second mortgage on the property and must be repaid within 25 years or upon the sale of the home, whichever occurs first.
What are the benefits of getting pre-approved for a mortgage as a first-time home buyer?
Getting pre-approved for a mortgage offers several advantages for first-time home buyers. It provides a clear understanding of your budget by determining how much you can borrow, which helps you focus on homes within your price range. Pre-approval also strengthens your offer by showing sellers you are a serious buyer with secured financing, making your bid more competitive. Additionally, it can speed up the closing process since much of the paperwork and verification are completed in advance. Plus, with rate protection for 120 days, you’re safeguarded against rate increases, ensuring your mortgage rate remains stable. Overall, pre-approval gives you confidence and a strategic edge in the home-buying process.
What is the most common mortgage for first-time buyers?
The standard mortgage for first-time home buyers is a repayment period typically 25 years, although 30-year mortgages are becoming more widely available. For instance, starting August 1, 2024, first-time buyers can now purchase a new construction home with a 30-year mortgage and a down payment of less than 20%.
How do I qualify as a first-time home buyer in Ontario?
You or the person you’re buying the home with may qualify as a first-time home buyer if:
a) You have never previously purchased a home.
b)You have experienced a breakdown of a marriage or common-law partnership.
c) In the past four years, you have not lived in a home that was owned by you, a spouse, or a common-law partner.