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Buying your first property is among the biggest decisions you’ll make in a lifetime. And if you get your home at a good price with strong mortgage rates and terms, it can also become an investment that grows your money over time. Find out more about how you can take advantage of first-time home buyer incentives to get the best deal on your first mortgage.
There are a couple of different types of first-time home buyer mortgages you can sign up for depending on your preferences. You can mix and match the following options to get the ideal fit:
Consider the following factors when you’re comparing lenders to find the best fit for your needs:
There are a few ways you can save money on your first-time home buyers’ mortgage. These include the following:
You can learn more about government incentives, such as the RRSP Home Buyers’ Plan and the First-Time Home Buyer Incentive, below:
The RRSP Home Buyers’ Plan lets you take money out of your RRSP as a first-time home buyer to buy or build a home for yourself or a family member with a disability. In 2019, the government set the RRSP first-time home buyer withdrawal limit at $35,000. As a couple buying your first home, you can borrow as much as $70,000 under the RRSP Home Buyers’ Plan.
Just be aware that the RRSP Home Buyers’ Plan requires you to repay any money you borrowed from your RRSP in 15 years or less. If you fail to repay your RRSP money in this time period, you’ll be taxed heavily on it.
If you’re a first-time buyer with a qualified annual income of $120,000 or less, you may be eligible for the First-Time Home Buyer Incentive, which is a shared-equity mortgage with the government of Canada. This incentive lets you share the risks and rewards of taking on a new mortgage
You can apply for up to 5% of the purchase price of your home with the First-Time Home Buyer Incentive in most cases. Within 25 years or when you sell, you repay 5% of the sale price to the government if you have equity in the home. If your sale price is lower than what you bought the house for, the government will reimburse you for 5% of the negative equity.
Besides the First-Time Home Buyer Incentive and the RRSP Home Buyers’ Plan, you can also take advantage of the following tax benefits as a first-time home buyer:
Enter information such as your household income, number of dependants and any existing debts you owe into our calculator. This calculator estimates your expenses using a standard cost-of-living index to give you a home cost that you should be able to afford:
There are a number of actions you can take to make the most out of being a first-time home buyer. Learn how to compare mortgages and find out what special offers and incentives you might be eligible for. In particular, learn more about the RRSP Home Buyers’ Plan and the First-Time Home Buyer Incentive as well as any tax credits you could be eligible for.
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