Kathy  Markoff

Kathy Markoff

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First Time Buyers Guide

A Guide for First-Time Homebuyers

Buying in the Greater Toronto Area which is one of North America’s hottest residential real estate markets, therefore buying property here can lead to a very high return-on-investment.

There are a variety of ways to do so, but investing in real estate is a great way for first-time buyers to increase their net worth. 

When buying your first home, it can be a rather daunting experience, especially considering it’ll most likely be the most expensive investment you’ve ever made. Here are some helpful tips to guide you along your first home buying experience.

Breaking Down Your Down Payment

Your down payment is the percentage of your purchase price you put down for your home. The government of Canada has strict guidelines and brackets for down payment sizes. A home $500,000 and below requires 5%, whereas a home between $500,000 and $999,999 requires 5% of the first $500,000 and 10% for the portion above the purchase price above $500,000. A home over $1,000,000 would require a down payment of 20%.



Learn About CMHC Insurance

If you take out a mortgage that will be paying for more than 80% of your purchasing price, the Canadian Mortgage and Housing Corporation (CMHC) must insure your mortgage by law. You’ll be charged a premium dependent on how much you’ve spent on your down payment. Visit the CMHC website and use the calculator they provide to learn what your premium rates will be.

Study the Home Buyers Plan (HBP)

With your HBP, you’ll be permitted to borrow from your RRSP in order to buy your home—these funds aren’t taxable until they’ve been withdrawn. Click here for detailed information on the HBP.


Be Prepared for a Home Inspection

Given the gravity of the purchase, a thorough, professional inspection and comprehensive, report will help you make an educated buying decision. It will only cost $300-$800 hinging upon the size of the home.

Understand the Mortgage Process

A mortgage is a real estate-specific loan you must be approved and pre-approved for when you buy your first home. When applying, ask your lender or mortgage broker bout mortgage terms, amortization, fixed rates/variable rates, open and closed mortgages, prepayment charges and about how you qualify for a loan.

Know Your Legal Fees

In order to complete a smooth transaction, you’ll need a real estate lawyer right when you make an offer on a home. A real estate lawyer knows the ins and outs of real estate law and will ensure you’re protected by reviewing your offer, any potential status certificates and confusing legal terms. They’ll also take care of any nagging legal work on closing day, providing peace of mind during a particularly stressful time. Legal fees cost between $1,000 and $2,000 when taking into account disbursements, searches, registration, courier, and HST costs on commissions.

The Right Home is in The Right Neighbourhood

You want to move into a neighbourhood that’s the right fit for you. A house itself might look ideal to you, but it only becomes a dream home when it’s located in the right spot. Consider the type of home you want and your commuting distance to work. You also need to take into account the nearest schools and daycares in the area on top of grocery stores and malls. If you’re an outdoorsy person, you’ll want to be conscious of parks, trails, and other outdoor recreation in the area.


Bone Up On Home Insurance

  • You’ll be asked this laundry list of questions about your home:
  • What year was it built?
  • What type of construction was used (wood frame, brick, or concrete)
  • How many floors?
  • What size are the main living areas?
  • What size are the finished and unfinished basement areas?
  • How many bathrooms?
  • How many fireplaces? (Are they gas or wood burning?)
  • What size are any decks or patios?
  • What size are attached garages or carports?
  • What kind of swimming pool is in your home?
  • Are there any detached structures? (garage, sheds, or carriage houses)

For first-time home buyers, making that first purchase can be an intimidating process.

Working with many First Time Buyers, I recognize the difficulty of this process for those who are not well-versed with the real estate market. On this page you can find information to help make the buying of your first home go as smoothly as possible:

First Time Buyers Incentive.  In order to ensure that buyers are not saddled with an unwieldy amount of financial burden, a range of programs & incentives are available. These include special mortgages, mortgage insurance and an array of tax credits. For more info call me so that I can explain Find out more information if you are looking at buying in Toronto www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive

RRSP Withdrawals. As part of the Government of Canada’s Home Buyers’ Plan, a maximum of $35,000 per individual (or $70,000 per couple) can be withdrawn from an RRSP account to help finance the purchase of a new home. 

Land Transfer Tax Rebates. While not available in all provinces, Ontario provides refunds on land transfer taxes on purchases above $368,000. The maximum available refund amount for provincial taxes is $4,400, while the cap for municipal refunds is $4,475. 

Mortgages. Choosing the mortgage plan that is right for you is a daunting task-especially if it is your first time buying a home. Getting a mortgage can make the buying of your first home much easier-as it eliminates the need to pay the entire purchasing price up front. However, it can still be an incredibly daunting process. I have created several calculators for use by homebuyers, for services ranging from affordability to mortgage rates and carrying costs 

Click on this link that takes you to a page of various Calculator Tools to help you in the buying process  http://kathyourealtor.com/mortgagecalculators

This link below is a Mortgage Calculator that allows potential homebuyers to determine the mortgage rate that best suits their needs. In order to use it, they will need the following: https://www.kathyourealtor.com/mortgage/calculator

  • The estimated purchase price of your home
  • The amount of your down payment
  • The length of your amortization period (the time in which the mortgage is to be paid off)
  • If your down payment is under 20% of the purchase price, then you are required to purchase mortgage insurance (the size of which will be included in calculations). Mortgage insurance cannot be obtained if the purchasing price is over $1 million.

Mortgage Calculator w/Amortization Schedule      

This calculator generates an amortization schedule for your current mortgage. Quickly see your principal balances, as well as how much interest you will pay.  The impact of any principal prepayments can also be determined. For a full amortization schedule, either by year or by month, press the report button.

​Affordability Calculator https://www.kathyourealtor.com/MortgageQualifier

This tool allows uses to calculate the housing option that best fits their price range. There are options for buying, renting or both. These are used in conjunction with a person’s income, monthly expenses and the province in which they live. Once all the above information has been entered, the affordability calculator will produce a rental rate that is the recommended maximum amount for them to afford comfortably.

Land Transfer Tax Calculator  https://www.kathyourealtor.com/landtransfertaxcalculator

Land transfer taxes are normally calculated as a percentage of the property value, with properties sold in Toronto also incurring municipal taxes. As a result, they often take up the largest percentage of closing costs. However, many provinces offer tax refunds for first-time buyers. In Ontario, the refund for first-time buyers has a maximum amount of $4,000, with properties priced at over $368,333 being eligible for the full refund. RateHub offers a tool than can calculate your land transfer tax rate, as well as the available refund depending on your province of residence.


July 2021~Details on the now live First-Time Home Buyer Expanded Program


First time home buyers purchasing a home in the Toronto, Vancouver, or Victoria Census Metropolitan Areas are now eligible for an increased Qualifying Annual Income of $150,000 instead of $120,000, and an increased total borrowing amount of 4.5 instead of 4.0 times their qualifying income.

Find out how the program can lower monthly mortgage payments 

Calculate Now 

Confirm if the home you are looking to buy is part of the Toronto, Vancouver or Victoria Census Metropolitan Area!



The First-Time Home Buyer Incentive makes it easier for you to buy a home and lower your monthly mortgage payments. This program is a shared equity mortgage. This means that the government shares in the upside and downside of the property value. It allows you to borrow 5 or 10% of the purchase price of a home. You pay back the same percentage of the value of your home when you sell it or within a 25-year window.

It works like this:

  • You receive a 5% incentive of the home’s purchase price of $200,000, or $10,000. If your home value increases to $300,000 your payback would be 5% of the current value or $15,000.
  • You receive a 10% incentive of the home’s purchase price of $200,000, or $20,000 and your home value decreases to $150,000, your repayment value will be 10% of the current value or $15,000.

Just as the name implies, this incentive is for first-time homebuyers. You’re considered a first-time homebuyer if:

  • you have never purchased a home before
  • you did not occupy a home that you or your current spouse or common-law partner owned in the last 4 years (the 4-year period begins on January 1 of the fourth year before the Incentive is funded and ends 31 days before the date the Incentive is funded)
  • you have recently experienced the breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time home buyer requirements)



   Use the calculator to find out if you qualify for the incentive.

These are a few criteria to determine your eligibility for the First-Time Home Buyer Incentive:

  • your total annual qualifying income doesn’t exceed $120,000 ($150,000 if the home you are purchasing is in Toronto, Vancouver, or Victoria)
  • your total borrowing is no more than 4 times your qualifying income (4.5 times if the home you are purchasing is in Toronto, Vancouver or Victoria )
  • you or your partner are a first-time homebuyer
  • you are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada
  • you meet the minimum down payment requirements with traditional funds (savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member)

The Incentive is like a second mortgage on your home. Your first mortgage must be greater than 80% of the value of the property and is subject to a mortgage loan insurance premium. It also must be eligible through Canada GuarantyCMHC or Sagen.

The insurance premium is based on the loan-to-value ratio of the first mortgage only. That is, the first mortgage amount divided by the purchase price. You don’t pay mortgage insurance on the incentive – it is included with the total down payment.

The type of home you plan to purchase plays a factor. The table indicates the type of home that qualifies for the incentive and how much of an incentive it may be eligible to receive.



New Construction

5% or 10%

Existing Home


New and existing mobile/manufactured home



Residential properties can have 1 to 4 units and include:

  • single family homes
  • semi-detached homes
  • duplex
  • triplex
  • fourplex
  • town houses
  • condominium units
  • mobile homes

The bottom line: Your property must be located in Canada and must be suitable and available for full-time, year-round occupancy. Your home is for you to live in and can’t be used as an investment property.

Other details you need to know

The Incentive may be associated with additional costs:

  • Additional legal fees: Your lawyer is closing 2 mortgages so you may be charged higher fees.
  • Appraisal fees: To repay your incentive, you may need to have an appraisal done to determine the fair market value of your home.
  • Other fees: Additional fees may be incurred throughout the life cycle of the incentive, like switching your first mortgage to a new lender or refinancing your first mortgage.
  • Property Insurance premiums: Additional costs may be incurred to account for an additional mortgage registered on the property. Talk to your insurance broker or insurance provider to find out more details.

Here’s an example:

Anita wants to buy a new home for $400,000 and has saved the minimum required down payment of $20,000 (5% of the purchase price).

Under the First-Time Home Buyer Incentive, Anita can apply to receive $40,000 in a shared equity mortgage (10% of the cost of a new home) through the program.

This lowers the amount Anita needs to borrow and reduces the monthly expenses.

As a result, Anita’s mortgage is $228 less a month or $2,736 a year.

Ten years later, Anita sells the home for $420,000. The Incentive will need to be repaid as a percentage of the home’s current value.

This would result in Anita repaying 10%, or $42,000 at the time of selling the house.

                                          Get more examples (PDF).


Repayment Details

The Incentive must be paid in full – that is no partial payment – after 25 years or when the home is sold. There are a few ways where changes to the Incentive can trigger repayment:

  • You go through a break up and you want to buy out the co-borrower. If this requires additional insured funds, you must pay back the Incentive in full.
  • Porting your mortgage will trigger a repayment of the Incentive.
  • A partial release of security is considered a sale and will trigger repayment of the Incentive.

Borrowers should discuss with their lender if repayment of the incentive is required under certain refinancing situations.


Once you’ve been pre-approved for a mortgage, found the home you’re looking for and determined you’re eligible to apply for the incentive, it’s time to apply. Simply fill out these 2 application forms to apply for the First-Time Home Buyer Incentive:

FTHBI - SEM Information Package (PDF) 

SEM Attestation and Consent Form (PDF) 

Once complete, give these to your lender. They will submit the application for you.

Give the final signed copy of the shared equity mortgage package to your solicitor to retain on your behalf.

When you receive your acceptance, call FNF Canada at 1-(855) 844-4535 to activate your incentive and provide the name of your lawyer/notary. (This must be at least 2 weeks prior to your closing date.)


Repayment Details

The Incentive must be paid in full – that is no partial payment – after 25 years or when the home is sold. There are a few ways where changes to the Incentive can trigger repayment:

  • You go through a break up and you want to buy out the co-borrower. If this requires additional insured funds, you must pay back the Incentive in full.
  • Porting your mortgage will trigger a repayment of the Incentive.
  • A partial release of security is considered a sale and will trigger repayment of the Incentive.

Use these informational pieces to understand more about the incentive.

Borrowers should discuss with their lender if repayment of the incentive is required under certain refinancing situations.


Tip: See some examples of how the expanded program works in Toronto, Victoria, and Vancouver

New Toronto, Vancouver, Victoria criteria.

Please use any of the following Statistics Canada tools to determine if your home falls into the Toronto, Victoria or Vancouver CMA’s:
Note: All First time home buyer questions should be directed to the program administrator at fthbi@cmhc-schl.gc.ca

Statistical Area Classification List and Census Subdivisions

Statistical Area Maps (Interactive)

Statistical Area Maps (PDF)

Postal Code Search (Please note that this tool is for Employment Insurance Economic regions, which are the same as the CMA for Toronto, Vancouver and Victoria. Confirmation of the location of the property will come from the Program Administrator).


Mortgage Professional Toolkit

Find detailed information and marketing materials for the First-Time Home Buyer Incentive

Related Videos


  Please send me more details about the incentive when they are available.

Still have questions about the First-Time Home Buyer Incentive?


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