Question 1

How much down payment do I actually need?

Accepted Answer

In Canada the minimum is 5% on the first $500,000 of the purchase price, 10% on any portion between $500,000 and $1,499,999, and 20% at $1,500,000 or more. On a $750,000 home that means a minimum of $50,000 (5% of $500,000 plus 10% of $250,000). Anything under 20% requires mortgage default insurance.

Question 2

What's the difference between the FHSA and the Home Buyers' Plan — can I use both?

Accepted Answer

The FHSA lets you contribute up to $8,000 per year to a $40,000 lifetime maximum; contributions are tax-deductible and qualifying withdrawals for a first home are completely tax-free with nothing to repay. The Home Buyers' Plan lets you withdraw up to $60,000 tax-free from an existing RRSP, but you must repay it to your RRSP over 15 years. Yes — the two are stackable, and most first-time buyers should use both.

Question 3

What happens if my down payment is under 20%?

Accepted Answer

Your mortgage must be insured through CMHC, Sagen, or Canada Guaranty. The premium is roughly 2.8% to 4.0% of the mortgage amount depending on your loan-to-value, plus 0.20% if you choose a 30-year amortization. The premium is added to your mortgage rather than paid in cash, so it raises your payment slightly — but insured mortgages usually carry the lowest available rates.

Question 4

How does the mortgage stress test affect how much I can borrow?

Accepted Answer

Lenders must qualify you at the greater of your contract rate plus 2% or 5.25%. So if your rate is 4.39%, you are approved on a 6.39% payment. This is why your pre-approval amount is lower than a simple payment calculation suggests, and why comparing lenders matters — small rate differences change your qualifying ceiling.

Question 5

What land transfer tax rebates do I qualify for?

Accepted Answer

Ontario first-time buyers receive a provincial land transfer tax rebate of up to $4,000. If you're buying in the City of Toronto you also receive a municipal rebate of up to $4,475, for a combined maximum of $8,475. Your real estate lawyer applies the rebates on closing so you never pay the tax up front.

Question 6

What documents do I need for pre-approval?

Accepted Answer

Two pieces of government-issued ID, two years of income documents (T4s, T1 General, and Notices of Assessment, plus a job letter and recent pay stubs if salaried), a list of monthly debts, and a 90-day paper trail for your down payment. If you're self-employed, add your business licence or articles of incorporation, two years of corporate tax returns, and corporate financial statements.

Question 7

What's the difference between pre-qualification and pre-approval?

Accepted Answer

A pre-qualification is an estimate based on the numbers you tell us — useful for budgeting in minutes. A pre-approval means we've reviewed your actual documents and credit, and a lender has issued a written commitment and rate hold, typically for 90 to 120 days. Realtors and sellers take a pre-approval far more seriously when you make an offer.

Question 8

Can I still buy my first home if I'm self-employed?

Accepted Answer

Yes. Self-employed borrowers with two years of filed business income can often qualify with A-lenders at standard rates. If your net income is written down for tax purposes, alternative (B) lenders will consider bank statements, business deposits, and add-backs. The key is structuring the file the way lenders read income rather than the way your accountant minimizes it.

Question 9

What happens after my offer is accepted?

Accepted Answer

Your deposit is normally due within 24 to 48 hours. You then have a condition period — usually 5 to 10 days — to finalize financing and complete a home inspection. We submit the file to the lender, satisfy any conditions, and once financing is confirmed you waive conditions and the deal is firm until closing.

Question 10

Should I apply with more than one broker or bank?

Accepted Answer

No. Multiple applications create multiple credit inquiries, which can lower your score and confuse lenders. One broker can shop 80+ lenders on a single credit pull, so you get competitive rate comparison without damaging your credit profile.

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FHSA

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This Guide Is Built For

Salaried first-time buyers

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Newcomers to Canada

Buyers under 20% down

Condo buyers

Young families

Keep Reading — Tools & Related Guides

All Mortgage & Affordability Calculators

Home Buyer Checklist — Offer to Move-In

Buying Your First Home While Self-Employed

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All Frequently Asked Questions

Mortgage Loan Insurance for Consumers

Financial Consumer Agency — Mortgage Basics

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