Your Downpayment

Your Down Payment

There is nothing more exciting than buying your first home. Owning your own home has a lot of payoffs, especially these days when mortgage rates are still low and there are also many housing options available in a wide range of prices. Simply put, you can carry a home of your own for no more than what you would pay in rent.

When most of us consider becoming homeowners, we immediately think of how wonderful it will be. Being a homeowner is something to be proud of, provides stability, and unlike renting, your payments go toward increasing the equity in your home.

So, why such a great number of people think they are not ready to buy a house?

For most people who have never owned a home before, it's the initial down payment and the ability to keep up with the regular monthly financial obligations (mortgage payment, insurance, utilities, maintenance). It means changing their spending and lifestyle habits to support the additional costs of saving for, paying for, and maintaining a home.

One of the best ways of saving for a down payment is to take advantage of government programs available to first-time home buyers. We can help you understand how these programs work and ensure that you get the maximum benefit possible.

RRSP Home Buyers' Plan

Did you know Registered Retirement Savings Plan (RRSP) can be used towards the purchase of a first home? RRSPs are a great way to secure your financial future while enjoying tax benefits today. Try to contribute to your Registered Retirement Savings Plan (RRSP) regularly and to the maximum allowed. You can set up an RRSP through your bank or other financial institutions like credit unions or insurance companies.

The Federal Government of Canada has a First Time Home Buyers’ Plan (HBP) that enables eligible taxpayers to withdraw up to $25,000 tax free from their plan to buy or build a qualifying home. The amount of money withdrawn must be repaid within 15 years, beginning in the third year after withdrawal.

If you buy the qualifying home together with your spouse or your partner, each person can withdraw up to $25,000 tax free. A government form must be completed for each withdrawal.

You can create an RRSP with borrowed money and withdraw the money as a down payment through HBP. Find out how you can use RRSP for your down payment.

CMHC or GE five per cent down

While high ratio mortgage insurance program does not help you save for the down payment, it sure eases your way to home ownership. High ratio mortgages must be insured through CMHC (Canada Mortgage and Housing Corporation) or GE (GE Capital Mortgage Insurance Canada).

With as little as five per cent down, all home owners now have access to high ratio mortgage insurance. This means CMHC or GE may insure the mortgage on your home (against default in payments) for up to 95 per cent of the lending value of the home. This helps make home ownership a reality for many Canadians who can afford monthly mortgage payments but would have trouble saving for a larger down payment.

Previously available only to first-time home buyers, the program was expanded to include all home buyers. Eligible borrowers include anyone who buys a home in Canada and occupies it as a principle residence. The mortgage insurance premium is based on percentage of the mortgage loan and can be added to the mortgage or paid on a monthly basis.

Beyond mortgage products, there are other sources to consider for your down payment needs. You can use your savings, gift from a parent, or gift from close relative. Find out how to save for a down payment.

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Buying a home is beginning of an exciting adventure and for most buyers it is the biggest financial investment of their lives. Yet a great number of people follow emotional impulses to the exclusion of sound thinking when they make an offer on a property they want to buy. Read more...


Arranging to pay for that property you plan to buy is one of the most important financial decisions you will ever make. Regardless of how certain you are that you will get mortgage, it is always good idea to get pre-approved from the mortgage lender of your choice. Read more...

Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world."

Franklin D. Roosevelt

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