First-Time Home Buyer Guide — Canada 2026
Everything you need to know: government programs, down payment rules, CMHC insurance, provincial rebates, and a step-by-step checklist.
Down Payment Rules
| Purchase Price | Minimum Down | Example |
|---|---|---|
| ≤ $500,000 | 5% | $400K → $20,000 |
| $500,001 – $1,499,999 | 5% on first $500K + 10% on rest | $800K → $55,000 |
| ≥ $1,500,000 | 20% (no insurance available) | $2M → $400,000 |
CMHC Insurance Premiums
| Loan-to-Value | Premium Rate |
|---|---|
| ≤ 65% | 0.60% |
| 65.01% – 75% | 1.70% |
| 75.01% – 80% | 2.40% |
| 80.01% – 85% | 2.80% |
| 85.01% – 90% | 3.10% |
| 90.01% – 95% | 4.00% |
30-Year Amortization Surcharge: First-time buyers with amortization > 25 years pay an additional +0.20% premium.
Government Programs for First-Time Buyers
FHSA (First Home Savings Account)
Active- Contribute up to $8,000/year (lifetime max $40,000)
- Contributions are tax-deductible (like RRSP)
- Withdrawals for home purchase are tax-free (like TFSA)
- Must be a first-time buyer and Canadian resident
- Account must be open for at least 1 year before withdrawal
HBP (Home Buyers' Plan)
Active- Withdraw up to $60,000 from your RRSP tax-free
- Must repay over 15 years (starting 2 years after withdrawal)
- Can combine with FHSA for up to $100,000 tax-advantaged
- Must be a first-time buyer (haven't owned in last 4 years)
- Home must be your primary residence
First-Time Home Buyer Tax Credit
Active- Federal non-refundable tax credit of $10,000
- Provides up to $1,500 in tax relief
- Claim on your tax return the year you purchase
- Can be shared between spouses/partners
First-Time Buyer LTT Rebates by Province
| Province | Rebate | Details |
|---|---|---|
| Ontario | Up to $4,000 | Covers LTT on roughly the first $368,000 |
| Toronto (MLTT) | Up to $4,475 | Additional rebate on municipal LTT (on top of Ontario) |
| British Columbia | Full exemption | Homes under $500K exempt; partial up to $525K |
| Alberta | N/A | No land transfer tax — only nominal registration fee |
| PEI | Full exemption | First-time buyers exempt from 1% transfer tax |
First-Time Buyer Checklist
- 1Check your credit score (aim for 680+). Fix errors 6+ months before applying.
- 2Open an FHSA and start contributing ($8,000/year). This can be combined with HBP.
- 3Calculate your maximum budget with the stress test. Use our affordability calculator.
- 4Get pre-approved (not just pre-qualified) — locks your rate for 90-120 days.
- 5Research first-time buyer programs: federal tax credit, provincial LTT rebates.
- 6Budget for closing costs: LTT, legal fees ($1,500-$2,500), title insurance ($300-$500), home inspection ($400-$600).
- 7Choose your mortgage: fixed vs. variable, 25 vs. 30-year amortization, payment frequency.
- 8Make your offer conditional on financing and home inspection.
- 9Finalize mortgage with your broker. Provide T4s, NOAs, bank statements, employment letter.
- 10Close and move in. Set up property tax and insurance payments.
Your True Cost of Credit as a First-Time Buyer
Most first-time buyers focus on the interest rate, but your cost of credit — the total you pay over the life of the mortgage — is what really matters. Here's how the decisions you make today affect it.
CMHC Insurance Adds to Your Cost of Credit
With 5% down on a $500,000 home, your CMHC premium is 4.00% × $475,000 = $19,000. This is added to your mortgage principal, meaning you pay interest on the premium too — increasing your total cost of credit by approximately $30,000+ over 25 years.
25-Year vs. 30-Year Amortization
A 30-year amortization lowers your monthly payment but dramatically increases your cost of credit. On a $475,000 mortgage at 4.5%: 25 years = ~$308,000 in interest vs. 30 years = ~$383,000 in interest. That's $75,000 more in cost of credit — plus the 0.20% CMHC surcharge for 30-year terms.
Rate vs. Cost of Credit: They're Not the Same
A 4.5% rate with 25-year amortization can have a lower total cost of credit than a 4.2% rate with 30-year amortization. Always compare the total cost, not just the rate. Use our Payoff Lab to see the difference.
Looking ahead: Your first mortgage term is just the beginning. In 3-5 years, you'll face your first renewal — the decisions you make then will reshape your cost of credit for decades. Start thinking about it now, not just today's rate.
Frequently Asked Questions
Camilo Rodriguez
Founder of Mortgages Lab & Mortgage Expert
Camilo Rodriguez is the Founder of Mortgages Lab, a licensed mortgage broker with over 20 years of experience helping Canadians achieve financial freedom. He has trained 100+ mortgage agents across Canada, served as a former Mortgage Manager for TD Canada Trust, and was Past President of the Canadian Mortgage Broker Association – BC. He is the author of "From Debt to Zero," a guide to becoming mortgage free.
P.A.Y.O.F.F™, L.A.B™, M.A.P™ are Trademarks of Mortgages Lab®
Financial Disclosure
This page contains informational content only and does not constitute financial advice. Mortgage rates shown are sourced from publicly available lender data and may change without notice. Always verify rates directly with the lender. Mortgages Lab may receive compensation from partner lenders, which does not influence our editorial content or rate rankings. Built on Real Experience — 20+ years of working with real mortgage scenarios and helping Canadians achieve financial freedom.
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