First Time Buyers

First Time Home Buyers
Ontario Land Transfer Tax Rebate for First Time Buyers
  • Maximum refund is $2,000
  • May be claimed at registration to offset the amount of the tax
  • Must be at least 18 years of age
  • Must occupy the home as your principal residence
  • Cannot have owned a home, or an interest in a home, anywhere in the world
RRSP
Using your RRSP for Your Downpayment
  • First time buyers can borrow upto $25,000 from their RRSP
  • Must be paid back to your RRSP over 15 years
  • Funds must be in the RRSP for at least 90 days to be eligible
  • Must occupy the home as your principal residence
Closing Costs
What closing costs can you expect?
  • Ontario Land Transfer tax
    • eg: $2,975 on a $300,000 purchase
  • Toronto Land Transfer tax
    • eg: $2,725 on a $300,000 purchase
  • Legal Fees + Disbursements
    • Expect $1,100 to $2,000 depending on complexities
  • Appraisal Fees
    • $250 to $500
  • CMHC/Genworth Insurance Fees
    • Applicable on mortgages with less than 20% downpayment
    • The insurance premium is added to your mortgage
    • The tax on the premium is payable on closing
  • Property tax adjustments and/or advances
    • If the vendor pre-paid the tax you will have to reimburse them
    • If the lender is paying the taxes they may require an initial deposit
  • Moving expenses
    • Varies depending on the purchase, but count on there being some costs
Mortgage
Buying with No Money Down
  • Still available and supported by CMHC
  • Must have an excellent credit history and credit score
  • The Lender will give you the 5% downpayment at closing
  • Expect to pay a higher rate of interest so the lender gets their money back
  • Must prove that you have enough closing costs on hand
Red Box with Percent Sign
Fixed Rate vs. Variable Rate
  • Fixed rates offer protection against rising interest rates
  • Variable rates are significantly lower and offer large interest savings
  • Fixed rates can have significant pre-payment penalties
  • Variable rates are more difficult to qualify for to ensure ability to absorb rate increases
  • Historically, variable rates have proven to be less costly than fixed rates