First-Time Home Buyers in Ontario
Buying Your First Home? Let's Make the Mortgage Part Simple.
Buying your first home is exciting, but figuring out how much you can afford, how much you need for a down payment, and which mortgage is right for you can quickly become overwhelming.
Garland Mortgage Solutions helps first-time home buyers in Mississauga and across Ontario understand their mortgage options and prepare for the home-buying process with confidence.
From your first pre-approval to closing day, our mortgage team is here to answer your questions, explain your options, and help you understand what comes next.
Start With a Mortgage Pre-Approval
Before you start seriously shopping for a home, it’s important to understand what you may be able to afford.
A mortgage pre-approval can give you a clearer picture of your potential mortgage amount and the price range you should consider when looking for a home.
During the process, we’ll typically review factors such as:
- Your income and employment
- Your existing debts and monthly obligations
- Your credit history
- Your available down payment
- The type of property you’re considering
- Current mortgage rates and lender qualification requirements
A pre-approval is not a guarantee of final mortgage approval. Your financial information and the property you purchase will still need to meet the lender’s requirements before your mortgage receives final approval.
First-Time Home Buyer Programs in Canada & Ontario
One advantage of buying your first home is that you may qualify for programs designed to help with saving for a down payment, purchasing a home or reducing some of the costs associated with buying.
Eligibility requirements vary by program, so it’s important to confirm which programs apply to your individual situation.
Important: Government programs, tax rules and mortgage qualification requirements can change. The information above is general information and should not be considered tax or legal advice. Confirm your eligibility with the applicable government agency and consult a qualified tax or legal professional where appropriate.
The First Home Savings Account, or FHSA, is a registered account designed to help eligible Canadians save toward their first home.
When you open your first FHSA, you generally receive $8,000 of participation room for that year. The lifetime FHSA contribution limit is $40,000.
Contributions may be tax-deductible, and qualifying withdrawals used toward a qualifying first home can generally be made tax-free.
Unused participation room may also be carried forward, subject to the FHSA rules and limits.
The Home Buyers’ Plan allows eligible home buyers to withdraw money from their RRSP to purchase or build a qualifying home.
The current withdrawal limit is up to $60,000 per eligible individual.
Eligible buyers can also use the Home Buyers’ Plan and make a qualifying withdrawal from an FHSA toward the same qualifying home, provided they meet the requirements of both programs.
If you’re using the HBP, remember that it has repayment requirements. The timing of those repayments depends on when your first withdrawal is made and the rules applicable at that time.
Eligible home buyers may be able to claim the federal Home Buyers’ Amount, a non-refundable tax credit designed to help with some of the costs associated with purchasing a qualifying home.
The amount and eligibility requirements should be confirmed for the tax year in which you purchase your home.
Eligible first-time home buyers purchasing a home in Ontario may qualify for a refund of some or all of Ontario’s land transfer tax, up to a maximum of $4,000.
Eligibility requirements apply, including rules relating to previous homeownership, occupancy and residency status.
Additional municipal land transfer taxes may also apply depending on where you purchase your home.
Buying a new home? There’s another program worth knowing about.
Eligible first-time home buyers purchasing, building or substantially renovating a qualifying first home may be able to recover some or all of the GST, or the federal portion of the HST, paid on the home.
For qualifying new homes valued at:
$1 million or less: The rebate can cover up to 100% of the GST or federal portion of the HST paid, to a maximum rebate of $50,000.
More than $1 million but less than $1.5 million: The maximum rebate is gradually reduced.
$1.5 million or more: The first-time home buyers’ federal GST/HST rebate is not available.
Specific eligibility rules, purchase-agreement dates, construction timelines and application deadlines apply.
Why First-Time Home Buyers Work With Garland Mortgage Solutions
Garland Mortgage Solutions is a Mississauga-based mortgage team helping first-time home buyers across Ontario navigate the mortgage process.
Clear Explanations
Don't know what amortization means? Confused about fixed versus variable? Not sure how a financing condition works? Ask us. We'll explain mortgage terminology and your options in plain language so you can make an informed decision.
Guidance From Pre-Approval to Closing
Getting pre-approved is only the beginning. Our team stays involved as you search for a property, make an offer, complete your mortgage application and prepare for closing.
Advice Based on Your Situation
Your income, down payment, credit, debts and future plans won't be identical to another buyer's. We take the time to understand your situation before exploring mortgage options.
Multiple Lender Options
We work with a wide range of lenders, allowing us to explore different mortgage products based on your financial situation and needs.
Frequently Asked Questions By First-Time Home Buyers
1. Understand Your Budget
Before looking at properties, we’ll help you understand how your income, debts, down payment and other financial factors can affect how much mortgage you may qualify for.
Remember, affordability isn’t only about your mortgage payment. You’ll also want to consider expenses such as property taxes, utilities, home insurance, condo fees where applicable, maintenance and other costs of homeownership.
2. Get Pre-Approved
We’ll review your financial information and explore mortgage options available through our lender network.
This can give you a better understanding of your potential budget before you begin making offers on homes.
3. Start Your Home Search
Once you have a better understanding of your budget, you can work with your real estate professional to look for properties that fit your needs and price range.
4. Make an Offer
Found the right home? Your real estate professional can help you prepare and submit an offer.
If your offer includes a financing condition, this gives you time to work on obtaining satisfactory financing before that condition is removed. The lender will still need to review the property and your application before providing final approval.
5. Finalize Your Mortgage
Once you have an accepted offer, we’ll work with you to complete the mortgage process, submit the required documents and coordinate with the lender.
We’ll also walk you through your mortgage options so you understand important details such as your rate, term, amortization, payment frequency, prepayment privileges and potential penalties.
6. Prepare for Closing
Your lawyer will handle the legal side of the transaction and mortgage funding.
We’ll stay involved from the mortgage side as you approach closing so you know what to expect before you get the keys to your first home.
The minimum down payment in Canada depends on the purchase price of the home.
Homes priced at $500,000 or less
- The minimum down payment is 5% of the purchase price.
Homes priced from $500,001 to $1,499,999
You’ll need:
- 5% on the first $500,000
plus - 10% on the portion above $500,000
For example, if you purchase a home for $750,000:
5% of the first $500,000 = $25,000
10% of the remaining $250,000 = $25,000
Minimum down payment = $50,000
Homes priced at $1.5 million or more
Mortgage loan insurance isn’t available under the standard insured-mortgage framework, and a minimum down payment of 20% is required.
If your down payment is less than 20%, mortgage default insurance will generally be required, subject to the applicable mortgage-insurance and lender requirements.
You don’t necessarily need to figure this out on your own. Garland Mortgage Solutions can help you calculate the down payment you’ll need and understand how different down payment amounts could affect your mortgage.
Yes. Eligible first-time home buyers with an insured mortgage can qualify for up to a 30-year amortization.
A longer amortization spreads your mortgage repayment over a longer period, which can reduce the required mortgage payment. However, taking longer to repay the mortgage generally means paying more interest over the life of the mortgage.
If your down payment is less than 20%, the current maximum amortization is generally:
- 30 years if you’re a first-time home buyer and/or purchasing a new build
- 25 years in other cases
If you have a down payment of 20% or more, maximum amortization periods are determined by the lender and mortgage product.
We’ll help you compare your options and understand the difference between choosing a 25-year and 30-year amortization where both are available.
There isn’t one mortgage that’s best for every first-time home buyer.
The right mortgage depends on your finances, plans for the property, comfort with changing interest rates, expected length of homeownership and how much flexibility you want.
Here are some of the decisions we’ll help you understand:
Fixed vs. Variable Rate
A fixed-rate mortgage provides greater rate and payment certainty during your mortgage term.
With a variable-rate mortgage, your interest rate can change when the lender’s prime rate changes. Depending on the mortgage product, this may affect your payment, how much of your payment goes toward principal, or both.
Neither option is automatically better for every first-time buyer. The right choice depends on your situation and the mortgage products available when you’re ready to buy.
Mortgage Term
Your mortgage term is the length of time your mortgage agreement remains in effect before it comes up for renewal.
The term you choose can affect your interest rate, flexibility and what happens if you need to break your mortgage early.
Amortization
Your amortization is the estimated amount of time it will take to repay your mortgage based on the mortgage’s current terms and assumptions.
A longer amortization can lower your required payments but generally results in more interest being paid over time.
Prepayment Options
Some mortgages provide more flexibility to increase your regular payments or make lump-sum payments toward your mortgage without a prepayment penalty.
Mortgage Penalties
The lowest rate isn’t always the whole story.
It’s also important to understand what could happen if you need to sell your home, refinance or break your mortgage before the end of your term.
Garland Mortgage Solutions can help you compare more than just the advertised interest rate so you understand the mortgage you’re choosing.
When you go directly to a bank, you’re generally considering mortgage products offered by that particular financial institution.
A mortgage broker can explore mortgage options from multiple lenders, which may include banks, credit unions, monoline mortgage lenders and alternative lenders.
For a first-time home buyer, that means having someone help you understand:
- How much you may qualify for
- How much down payment you’ll need
- Which documents you’ll need
- Different lender and mortgage options
- Fixed versus variable rates
- Mortgage terms and amortizations
- Prepayment privileges and penalties
- What happens between your offer and closing day
At Garland Mortgage Solutions, our goal isn’t simply to give you a rate.
We want you to understand your mortgage and feel comfortable with the decisions you’re making.
It’s generally a good idea to speak with a mortgage professional before you begin seriously shopping for a home.
A pre-approval can help you understand your potential budget, prepare the documents you’ll need and identify potential qualification issues before you make an offer.
No. A mortgage pre-approval isn’t a guarantee of final financing.
Final approval can depend on verification of your financial information, whether your financial situation has changed, the property you’re purchasing, an appraisal where required and the lender’s guidelines.
The minimum down payment depends on the purchase price.
For a home priced at $500,000 or less, the minimum is 5%. For homes from $500,001 to $1,499,999, you’ll need 5% of the first $500,000 plus 10% of the portion above $500,000. Homes priced at $1.5 million or more require at least 20% down under the current mortgage-insurance framework.
Yes. If you meet the eligibility requirements for both programs, you can make a qualifying FHSA withdrawal and a Home Buyers’ Plan withdrawal from your RRSP toward the same qualifying home.
In many situations, an immediate family member may be able to provide some or all of your down payment as a non-repayable gift.
The lender will generally require documentation confirming the source and nature of the funds. Requirements can vary depending on the lender and mortgage program.
Having student loans, a car loan, credit cards or other debts doesn’t automatically prevent you from qualifying for a mortgage. However, the required payments on those debts can affect how much mortgage you qualify for because lenders consider your existing debt obligations.
No. You don’t necessarily need perfect credit to qualify for a mortgage.
Your credit history is one of several factors lenders consider, along with your income, debts, down payment, property and other qualification requirements.
Your down payment isn’t the only cash you’ll need when purchasing a home.
Depending on the transaction, closing and home-buying costs may include land transfer tax, legal fees, title insurance, appraisal costs, adjustments, moving expenses, home insurance and other expenses.
First-time home buyers may qualify for certain rebates or programs that can reduce some of these costs.
No. Garland Mortgage Solutions is based in Mississauga and helps first-time home buyers across Ontario & other provinces in Canada.
