First-Time Home Buyer
Down payment math, CMHC insurance, the stress test, and every current government program — explained by people who do this every day.
Start With a 15-Min CallIn Richmond, the entry-level detached home sits well above $1 million. That puts most first-time buyers in the condo or townhome market — Steveston Village, Brighouse, Ironwood, Capstan Village — where pricing ranges from the mid-$500s to the low $900s depending on size and building age. That price range matters because it determines your minimum down payment and whether CMHC default insurance applies.
Here's how the tiers actually break down:
CMHC default insurance (also offered by Sagen and Canada Guaranty) protects the lender if you default. The premium gets added to your mortgage principal, not paid out of pocket at closing. The cost ranges from 2.80% of the insured amount (at 15-19.99% down) up to 4.00% (at 5-9.99% down). It's real money, but it's also what lets you buy with less than 20% down — and on an insured mortgage, you actually access lower interest rates than an uninsured buyer at the same lender, because the lender's risk is covered.
The federal mortgage stress test requires you to qualify at the higher of your actual contract rate plus 2%, or 5.25% — whichever is greater. So if you're offered a 5-year fixed at 4.5%, the lender has to confirm you could still handle payments at 6.5%. This reduces your maximum qualifying amount compared to what the actual payment would be.
It's worth running the numbers before you set a property budget. The mortgage calculator lets you model different scenarios, but we'd recommend talking through the stress test ceiling with us before you start writing offers — Richmond listings rarely sit long enough to negotiate while you're recalculating.
The First Home Savings Account (FHSA) lets you contribute up to $8,000 per year (lifetime maximum $40,000) in tax-deductible contributions. Qualifying withdrawals for a first home purchase are completely tax-free. If you're planning to buy in the next few years, opening one now and putting anything into it starts the clock on that deduction.
The First-Time Home Buyer Incentive was a shared equity program run by the federal government — it has since wound down and is no longer available for new applicants. We mention it because clients often ask about it based on older search results or articles.
The BC Property Transfer Tax first-time buyer exemption is still active. If you're purchasing a home for $500,000 or less, you may be fully exempt from the PTT. There's a partial exemption for properties between $500,001 and $525,000. This is a provincial program, not a federal one, and your lawyer or notary handles it at closing.
The Home Buyers' Plan lets you withdraw up to $35,000 per person from your RRSP tax-free for a qualifying first home purchase (couples can pull $70,000 combined). The catch: you have to repay the withdrawal over 15 years or it gets included in your income. For some buyers this is a useful tool; for others the math doesn't favour it over leaving the RRSP invested. We'll walk through it honestly for your specific situation.
One thing most first-time buyers don't realize: insured mortgages (less than 20% down) typically come with lower lender rates than uninsured ones. The bank takes on less risk because the insurance covers them — and they pass some of that along in pricing. The premium you pay for CMHC is often partly offset by the lower rate you access on an insured product.
Nothing formal is required for the initial 15-minute call. But if you want to move quickly to a pre-approval, here's what you'll need:
Down payment sourced from a gift? Lenders want a signed gift letter confirming the money doesn't need to be repaid. We'll provide the template.
Book a free 15-minute call. No documents required for the first conversation.
Book My Pre-Approval CallOr use the calculator to model your payments first:
Mortgage Calculator →Common questions
For homes priced up to $500,000 the minimum is 5%. Between $500,001 and $999,999 you need 5% on the first $500,000 and 10% on the remainder. For homes $1,000,000 and above the minimum is 20% — CMHC default insurance is not available at that price point.
You must qualify at the higher of your actual contract rate plus 2%, or 5.25%. If you're offered 4.5%, you're tested at 6.5%. This is meant to ensure buyers can still handle payments if rates rise. It reduces the maximum purchase price you'll qualify for relative to the actual payment you'd make.
Yes. FHSA contributions are tax-deductible and qualifying withdrawals for a first home purchase are tax-free. The funds go toward your down payment. Even contributing a few thousand dollars this year starts giving you the deduction and builds toward the $40,000 lifetime contribution room.
Yes, most lenders accept gifted down payments from immediate family members — parents, siblings, grandparents. The requirement is a signed gift letter confirming the money is a true gift (not a loan) and that the donor confirms they aren't expecting repayment. Lenders also want to see the funds in your account for a minimum period, typically 90 days, or a clear paper trail showing the transfer.
We'll tell you exactly what you qualify for, what programs apply to your situation, and what to expect at every step.