First-Time Buyers & Programs

This is a game-changer for anyone considering a new build. On a $600,000 new home, you'd save $30,000 in GST. Combined with FHSA ($40K) and RRSP HBP ($60K per person), a single first-time buyer could access over $130,000 in government-supported savings. A couple: over $250,000.

The FHSA is the better program because withdrawals don't need to be repaid. RRSP HBP withdrawals must be repaid over 15 years. Use your FHSA first, then top up with HBP if needed. Both contributions are tax-deductible, and both withdrawals are tax-free for a qualifying home purchase.

Unused contribution room carries forward (up to $8,000). You can invest the funds inside the FHSA just like a TFSA or RRSP — growth is tax-sheltered. There's no minimum waiting period before withdrawal. You must be a first-time buyer (haven't owned a home you lived in during the current year or previous 4 years). Open one now, even with just $1 — it starts the clock on your contribution room.

Each year you must repay at least 1/15 of the total withdrawal. If you withdrew $60,000, that's $4,000/year back into your RRSP. If you miss a repayment, that year's portion is added to your taxable income. The funds must have been in the RRSP for at least 90 days before withdrawal.

The definition applies per person, not per couple. If your partner owned a home but you didn't, YOU still qualify as a first-time buyer for FHSA and HBP purposes. After a divorce or selling and renting for 4+ years, you can regain first-time buyer status. This surprises a lot of people — always check before assuming you don't qualify.

Example: On a $600,000 home — 5% of $500K ($25,000) + 10% of $100K ($10,000) = $35,000 minimum down payment. With less than 20% down, you'll also need CMHC mortgage default insurance, which adds 2.8%–4.0% to your mortgage amount depending on your down payment percentage.

Premium rates: 5%–9.99% down = 4.00% premium. 10%–14.99% = 3.10%. 15%–19.99% = 2.80%. On a $500,000 mortgage with 5% down, that's $19,000 in insurance added to your balance. The upside: insured mortgages often qualify for lower interest rates than uninsured ones, so the rate savings can partially offset the insurance cost over the term.

The tradeoff: lower monthly payments but more total interest paid over the life of the mortgage. On a $450,000 mortgage at 4.5%, the difference is about $230/month lower with 30-year vs 25-year — but you pay roughly $55,000 more in total interest. It's a tool for affordability, not a default choice.

Typical Alberta closing costs: legal fees ($1,200–$2,000), land title registration ($200–$400), title insurance ($250–$400), home inspection ($400–$600), property tax adjustment (prorated, varies), moving costs, and utility connections. If your down payment is under 20%, CMHC insurance is added to the mortgage — not a closing cost you pay out of pocket.

Pre-approval involves a credit check and income verification. The lender gives you a maximum purchase price and holds a rate. This protects you if rates rise while you're shopping. It also identifies any potential issues (credit, income, debt) early — so you can fix them before you find the home you want, rather than scrambling under a deadline.

A household earning $100,000/year can typically qualify for a mortgage around $400,000–$500,000 depending on debts, down payment, and property taxes. But "qualify" and "comfortable" are different things. Shawn always calculates what you CAN borrow versus what you SHOULD borrow — the second number matters more for your quality of life.

Example: If your actual rate is 4.29%, you must qualify at 6.29% (4.29% + 2%). This ensures you can handle rate increases. The stress test applies to ALL buyers (not just first-timers) and ALL lenders (banks, credit unions, monolines). It's the single biggest factor limiting purchase power in Canada.

The gift letter typically states: the amount, the donor's relationship to you, that it's a gift with no obligation to repay, and the donor's signature. Your broker provides the template. Some lenders require the gift to be deposited into your account 15–30 days before closing. Gifted funds can cover 100% of the down payment — there's no requirement for you to contribute your own savings (though some lenders prefer it).

Your credit score isn't the only factor — payment history matters more than the number itself. A 660 score with clean payment history is better than a 700 score with recent missed payments. If your score is borderline, a broker can identify which lenders are most likely to approve you and what rate to expect. Sometimes waiting 3–6 months to build credit saves you thousands in rate over 5 years.

If you're still on probation, some lenders will still approve if you have a strong file overall (good credit, solid down payment, low debt). If you switched careers entirely, lenders are more cautious because they want income stability. Two years in the same field is the gold standard, but it's not always a hard rule.

Self-employed adds T1 Generals and business financials. Using RRSP/FHSA adds account statements. Gifted down payment adds gift letter + donor's bank statement. Your broker gives you a personalized checklist based on your situation — don't try to guess what's needed.

The credit bureaus recognize that rate-shopping is responsible behavior. They treat clustered mortgage inquiries as one event. What DOES hurt your score: applying for multiple credit cards, car loans, and a mortgage all at the same time. Avoid opening new credit accounts while you're in the home-buying process.

Lenders re-verify your file before funding. If your debt ratios have changed, your employment has changed, or your credit shows new activity, they can pull the approval. This happens more often than people think. The worst time to finance a new car is between getting pre-approved and closing on your home. Wait until after you have the keys.

Alberta is attracting massive interprovincial migration — especially from BC and Ontario — because of lower home prices and no provincial sales tax. If you're relocating for work, lenders want to see your new employment letter. If you're buying before moving, make sure the timing works for occupancy requirements (most lenders require you to move in within 60–90 days of closing).

The structure: you pay above-market rent, with the premium credited toward your eventual purchase. If you DON'T buy (can't qualify, change your mind, life happens), you typically lose all the credits. The purchase price is set at signing — which can be great if the market goes up, but bad if it drops. The biggest risk: if you can't qualify for a mortgage at the end of the rent period, you lose everything you've built.