If you’re a first-time home buyer, you need to know that there are several programs they can help you out. You need to know everything about the process of applying for that first-time mortgage, so you get the best rate and save money.

Insurance from CMHC

CMHC is called mortgage default insurance. If you can’t come up with 20% down for your initial down payment, then you need to purchase mortgage insurance. This insurance protects the lender in case you’re not able to make mortgage payments. This insurance makes the various lenders comfortable working with individuals that aren’t able to make a large down payment on the mortgage.

To calculate the mortgage insurance, this is a percentage of the mortgage value amount. If you make a down payment between 5-9.99% the mortgage insurance is 3.6% of the mortgage amount. If the down payment is 10-14.99% the insurance is 2.40% and when you have a down payment of 15-19.99% then the mortgage insurance is 1.80%.

If you have a home purchase price of more than $1 million, then you can’t get CMHC insurance. If you plan to buy a home that is over this amount, then you must put 20% or more down as your initial payment.

In Canada, home buyers need to put down at least 5% as your down payment, but it only applies to homes that have a purchase price which is less than $500,000. If you buy a home that is more than $500,000, the government increases the amount that you must put down as a down payment. Now, you must put 5% down on the first $500,000 and this goes up to 10% if the amount is $500,000-$1 million.

The RRSP Home Buyer’s Plan

If you have bought a home within the past four years or lived in your spouse’s home within this same timeframe, you could qualify for the Home Buyer’s Pan offered by the government. This plan allows you to use your RRSP to borrow up to $25,000 which will be tax-free form the RRSP and use this as a find for your down payment. The money has to be in your RRSP for 90 days or more before you intend to purchase the property.

This program can be a get one for Canadians because when you withdraw from your RRSP early, this is considered to be taxable income. You are except in this situation, but you must begin to repay the amount you borrow from your RRSP two years after you purchase your home over the next 15 years.

The Land Transfer Tax Rebate

You can get a rebate on land transfer tax paid in British Columbia, Prince Edward Island, and Ontario. Homebuyers that live in Toronto are also eligible for a rebate on the land transfer tax as well as their provincial rebate. This amount applies to condos, homes to townhouses if you’re a first-time homebuyer in the city.

Tax Credit for First-Time Home Buyers

In 2009, the First Time Home Buyer’s Tax Credit was introduced. This gives first-time home buyers in Canada an opportunity to recover some costs that are associated with the purchase of their home. This can help offset inspections, legal fees, and other costs associated with the closing. This tax credit is valued at $750 and it’s non-refundable.

New Housing Rebate with GST/HST

The GST/HST new housing rebate is one that offers Canadians money back when they buy a home that has been newly built, renovated one, or had it rebuilt due to fire. The individual incurs GST/HST on the purchase of the home. The GST on a new home purchase or renovation is rebated to Canadians that qualify for it.


This guide should help you as a first-time home buyer. You should speak to a financial expert before you make any decisions as a first-time home buyer, so you understand what you’re getting into and how the various programs can help your individual situation.