Tax Credit

Works out to $750, must claim within the year of purchase, must include with personal tax return under line 369.2

RRSP Down Payment

Canadian government’s Home Buyers’ Plan (HBP) allows first time home buyers to borrow up to $25,000 from your RRSP tax free! Must be paid back within 15 years.

Land Transfer Tax Rebate

Receive a rebate up to $3,725 in Toronto and $4,000 anywhere else in Ontario.

Down Payment Rules

For homes less than $500,000, the minimum down payment is 5%.

For homes selling for between $500,000 and $1 million, the minimum down payment is 5% of the first $500,000 of the purchase price and then 10% of the purchase price between $500,000 and $1 million,

Homes over 1 Million 20% is required

Understanding CMHC (Default Insurance)

In Canada, any purchaser who has a down payment of less than 20% is required to purchase mortgage default insurance, which is also known as CMHC insurance. This insurance is offered by CMHC, Genworth and Canada Guarantee. This protects your lender in the event that you end up defaulting on your mortgage.

The premium you pay declines as your down payment increases. For down payments of 5% to 9.99%, homebuyers pay a premium rate of 4.0% of the mortgage amount. If you have a down payment of 10% to 14.99%, the insurance premium is 3.10% of the mortgage amount. And for down payments of 15% to19.99%, the CMHC insurance premium is 2.80%.

CMHC insurance isn’t needed if your down payment is 20% or greater. And it’s not available on homes that cost more than $1 million.