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First-Time Buyer Guide

First-Time Buyer Guide

Property4 min readFebruary 11, 2026
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Purchasing a first home is a milestone that requires thorough preparation. In Canada, first-time buyers benefit from several government programs designed to facilitate homeownership. The Home Buyers' Plan (HBP) allows withdrawals of up to $60,000 per person ($120,000 per couple) from an RRSP for a down payment, repayable over 15 years without interest. The First Home Savings Account (FHSA), introduced in 2023, allows contributions of up to $8,000 per year (maximum $40,000) with a tax deduction on contributions and tax-free withdrawals for purchase. The minimum down payment in Canada is 5% for the first $500,000 of the purchase price and 10% for the portion between $500,001 and $999,999. For properties at $1 million or more, the minimum down payment is 20%. CMHC, Sagen, or Canada Guaranty mortgage loan insurance is mandatory when the down payment is less than 20%. The fédéral First-Time Home Buyers' Tax Credit offers a non-refundable credit of $10,000 (providing $1,500 in tax savings). OSFI imposes a stress test on all buyers. An AMF-certified mortgage broker in Quebec is an invaluable ally for navigating these programs and obtaining the most competitive rate.

Complete First-Time Home Buyer Guide in Canada

Becoming a homeowner for the first time is an important milestone that generates as much enthusiasm as questions. In Quebec and across Canada, the buying process is governed by a set of laws, government programs, and specific mortgage regulations. This guide walks you through each step, from building your down payment to taking possession, including choosing a mortgage broker and available assistance programs.

Step 1: Assess Your Financial Capacity and Build Your Down Payment

Before shopping for a property, it is essential to know your real budget. The Office of the Superintendent of Financial Institutions (OSFI) imposes a stress test on all Canadian borrowers: it is necessary to qualify at the contract rate plus 2% or the floor rate of 5.25%, whichever is higher. This test applies to all buyers, regardless of the down payment amount. Maximum debt service ratios are 39% for the gross debt service ratio (GDS) and 44% for the total debt service ratio (TDS).

The minimum down payment in Canada is 5% of the purchase price for the first $500,000 and 10% for the portion between $500,001 and $999,999. To build this down payment, you can combine several sources: personal savings, FHSA, HBP, parental gift with a gift letter, and in some cases, an unsecured loan. Mortgage loan insurance is mandatory for any down payment below 20%, with premiums ranging from 2.8% to 4% of the loan amount.

Step 2: Take Advantage of First-Time Buyer Programs

  • HBP (Home Buyers' Plan): withdraw up to $60,000 per person from your RRSPs, repayable over 15 years. Funds must have been in the RRSP for at least 90 days before withdrawal.
  • FHSA (First Home Savings Account): deductible contribution of $8,000 per year, maximum $40,000 lifetime. Tax-free withdrawal for purchase. Can be combined with the HBP.
  • Fédéral First-Time Home Buyers' Tax Credit: non-refundable credit of $10,000, providing approximately $1,500 in tax savings at the base fédéral rate of 15%.
  • GST/HST New Housing Rebate: partial rebate of GST paid on new construction or major renovations if the purchase price is under $450,000.
  • Municipal programs: some Quebec cities offer grants or property tax credits for new homeowners. Check with your municipality.

Step 3: Consider selecting a Mortgage Broker

Choosing a mortgage broker is a crucial decision for the first-time buyer. In Quebec, mortgage brokers are regulated by the Autorité des marchés financiers (AMF) and must hold a valid licence under the Act respecting the distribution of financial products and services (LDPSF). A good broker gives you access to a vast network of lenders, well beyond your regular financial institution. They compare rates, conditions, prepayment privileges, and portability clauses to recommend the optimal product.

A mortgage broker's service is generally free for the buyer, since the broker is compensated by the lender through commission. The broker also serves as an advisor: helping you understand the differences between fixed and variable rates, choosing the appropriate term length, and structuring your application to maximize approval chances. Verify that your broker is properly registered with the AMF registry before entrusting them with your file.

Step 4: The Mortgage Pre-Approval

Mortgage pre-approval is an essential step before beginning your search. It gives you a maximum borrowing amount and a guaranteed rate for 90 to 120 days, protecting you against potential rate increases during your search. To obtain pre-approval, your broker will analyze your income (pay stubs, notices of assessment, employment letters), your debts (car loans, credit cards, student loans), and your credit history. A solid pre-approval also strengthens your negotiating position with sellers.

Step 5: From Purchase Offer to Possession

Once the property is found, you submit a purchase offer with standard conditions (financing, inspection). After offer acceptance, your broker submits the complete file to the lender for final approval. A pre-purchase inspection by a certified professional is strongly recommended and can prevent costly surprises. The notary then examines the titles, prepares the deed of sale and mortgage deed, and manages financial adjustments between the parties. Typical closing costs include notary fees ($1,000 to $2,500), transfer duties (welcome tax) calculated according to progressive brackets, and property tax adjustments.

Frequently Asked Questions

What is the minimum down payment for a first home purchase in Canada?
The minimum down payment is 5% of the purchase price for the first $500,000, and 10% for the portion between $500,001 and $999,999. For example, for a $400,000 property, the minimum down payment is $20,000. For a $700,000 property, it is $25,000 (5% of $500,000) + $20,000 (10% of $200,000) = $45,000. With less than 20% down payment, mortgage loan insurance is mandatory.
How does the HBP work for first-time buyers?
The Home Buyers' Plan (HBP) allows you to withdraw up to $60,000 from your RRSPs to buy your first home, without paying immédiate tax on the withdrawal. As a couple, that is $120,000 total. The funds must have been in the RRSP for at least 90 days. You have 15 years to repay the withdrawn amount to your RRSPs through minimum annual repayments. Any amount not repaid is added to your taxable income.
What is the FHSA and how can I use it for a first purchase?
The First Home Savings Account (FHSA) is a registered account allowing you to save up to $40,000 lifetime (maximum $8,000 per year) for the purchase of a first home. Contributions are tax-deductible (like an RRSP) and withdrawals for the purchase of a qualifying first home are tax-free (like a TFSA). The FHSA can be combined with the HBP to maximize your down payment.
Why should I work with a mortgage broker rather than going directly to my bank?
An AMF-certified mortgage broker works for you, not for a single institution. They have access to dozens of lenders (banks, credit unions, monoline lenders, insurers) and can compare rates and conditions to find the best product. The broker's service is generally free for the borrower, as they are compensated by the lender. The broker also guides you through programs like the HBP and FHSA and facilitates the qualification process.
What closing costs should I plan for beyond the down payment?
Plan for 3% to 5% of the purchase price in additional costs: transfer duties (welcome tax), notary fees ($1,000 to $2,500), pre-purchase inspection ($400 to $800), CMHC insurance premium if applicable, municipal and school tax adjustments, moving costs, and setup expenses. A realistic budget must include these costs in addition to the down payment.
When should I start the home buying process?
Ideally, start 6 to 12 months before your desired purchase. First obtain a mortgage pre-approval from a broker, which will give you a realistic budget and a guaranteed rate for 90 to 120 days. Begin saving in an FHSA and plan your HBP withdrawals if applicable. Good preparation puts you in a strong position to make a quick offer in a competitive market.

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Educational information only. This does not constitute financial advice under the Act Respecting the Distribution of Financial Products and Services (LDPSF). Consult an AMF-certified mortgage broker before making any financial decision.

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