First Time Home Buyers

There are certain advantages you gain when you buy your first home.

FIRST TIME HOME BUYER RRSP PLAN
Funds may be withdrawn tax free from you RRSP up to a maximum of $20,000 per person for a down payment on your first home under the following conditions:

1. Married couples are considered first time buyers if neither has owned a principal residence in the last five years. Notes:
2. Buyers may own or have owned investment property.
3. In certain cases only one spouse may qualify.
4. Cannot have participated in the Plan previously. You can only use the plan once.
5. Must be a resident of Canada. You do not have to be a Canadian Citizen.
6. The home must be located in Canada and be the principal place of residence.
7. You must repay your RRSP withdrawal over a period of 15 years with minimum payment of I/ 1 5 of the total amount withdrawn.

FIRST TIME BUYER 5% DOWN PROGRAM
First time buyers may purchase a home with only 5% down under the following conditions:

1. Price of property purchased is $300,000 (lower mainland) or less.
2. Home must be principal residence - does not apply to investment property.
3. Buyers must not have owned a home as a principal residence in the last 5 yrs. Exceptions:
   

   a) Only one buyer has to qualify for 2. and 3.

   b) Hardship due to homeowner having had to sell their principal residence:

   i) due to formal marital break-up (includes common-law).

   ii) for employment reasons and moved to a new geographic area.

   iii) and sustained a loss of equity. Provided that the net proceeds from the sale are applied to the purchase of subsequent principal residence as part or all of the down payment.

4. Payments for principal, interest, property tax, heating and 50% of any condominium fees can't exceed 32% of your gross family income. (GDS ratio)
5. Your total debt load can't exceed 40% of your gross family income. (TDS ratio)
6. CMHC Mortgage insurance must be purchased at a cost of 2.5% of the mortgage balance. This cost may be added to the mortgage and paid off monthly as part of the mortgage. This insurance is for the sole benefit of the lender but is required by law.
7. Down payment must be from your own resources or a gift. Financial gift from family must be in the buyers possession at least 30 days before making an offer.
8. Mortgage term must be at least 3 years but must be qualified at five years or longer.
9. At least one year on your current job.
10. Clean credit rating.
11. Buyers are required to demonstrate at the time of application their ability to cover closing costs of at least 1.5% of the purchase price in addition to the 5% down payment.
12. Maximum amortization period is 25 years.

FIRST TIME BUYERS ALSO RECEIVE A PURCHASE TAX EXEMPTION

Click here for our purchase tax exemption page.