First-Time Home Buyer's Guide to Canadian Mortgages in 2026
Buying your first home in Canada is an exciting milestone, but navigating the mortgage process can feel overwhelming. This comprehensive guide will walk you through everything you need to know about securing your first mortgage in 2026, from understanding down payment requirements to getting pre-approved.
Understanding Down Payment Requirements
One of the biggest hurdles for first-time buyers is saving for a down payment. In Canada, the minimum down payment depends on your home's purchase price:
- 5% minimum for homes priced under $500,000
- 5% on first $500k + 10% on remaining for homes $500,000 - $999,999
- 20% minimum for homes $1 million and above
What is CMHC Insurance?
If you're putting down less than 20%, you'll need mortgage default insurance from CMHC (Canada Mortgage and Housing Corporation), Sagen, or Canada Guaranty. This protects the lender if you can't make your payments.
The insurance premium ranges from 0.6% to 4.5% of your mortgage amount, depending on your down payment size. While it adds to your costs, it allows you to buy sooner with a smaller down payment. The premium can be paid upfront or added to your mortgage.
First-Time Home Buyer Incentives in Canada
Several programs can help first-time buyers get into the market:
Home Buyers' Plan (HBP)
Withdraw up to $60,000 from your RRSP tax-free to use as a down payment (must be repaid over 15 years).
First-Time Home Buyer Incentive (FTHBI)
The government offers 5-10% of the home's purchase price to reduce your monthly mortgage payments (income restrictions apply).
GST/HST New Housing Rebate
Get a rebate on the GST/HST paid on a new home purchase (available for homes under certain price thresholds).
Getting Pre-Approved: Why It Matters
Before you start house hunting, get pre-approved for a mortgage. This gives you:
- A clear budget - Know exactly how much you can afford
- Rate protection - Lock in your interest rate for 90-120 days
- Negotiating power - Show sellers you're a serious buyer
- Faster closing - Speed up the final approval process
Additional Costs to Budget For
Don't forget these closing costs and ongoing expenses:
Closing Costs (2-4% of purchase price)
- • Legal fees ($1,000-$2,000)
- • Land transfer tax (varies by province)
- • Home inspection ($400-$600)
- • Appraisal fee ($300-$500)
- • Title insurance ($200-$400)
Ongoing Costs
- • Property taxes
- • Home insurance
- • Utilities
- • Maintenance & repairs
- • Condo fees (if applicable)
Pro Tip
Working with a mortgage broker (like the ones we connect you with at Loan Lizard) gives you access to multiple lenders and better rates than going directly to a bank. Brokers can often secure deals that aren't publicly advertised, and their services are completely free to you!