Buy your home with only 5% down payment
At CanadianMortgageRates.com, we have helped hundreds
of First Time Home Buyers purchase their first home with only
5% down. The 5% down program was initially set-up for qualified
First Time Home Buyers but has recently been made available
to everyone, providing they qualify. As all mortgages that
are above 75% of the purchase price must be insured with default
insurance (CMHC or GE Capital insurance premiums), the insurance
premium charged is 3.75% when the down payment is less than
10% of the purchase price and this amount can be added to
This program has probably been the most successful
program that has made home ownership easier and attained earlier
than most people could have otherwise. In major Canadian centres,
the maximum purchase price is $250,000, whereas outside of
these centres it drops to $175,000 and then for rural areas,
the maximum purchase price is $125,000. Contact a CanadianMortgageRates.com
mortgage specialist for the amount in your area.
Using Your RRSPs To Buy A Home - The
Home Buyers' Plan (HBP)
The Home Buyers' Plan is a program established
by the federal government that allows an individual, who is
a qualified first-time home buyer, to withdraw up to$20,000
tax-free from their RRSPs (that's $40,000 per couple) to buy
or build a qualified home, located in Canada and be the buyer's
principal residence. The borrower must be a resident of Canada
and must not have previously participated in the Home Buyers'
Plan. To participate, you must complete "Form T1036"
and take to institution that holds your RRSPs . These forms
are available at the institution or at Income Tax offices.
If you participate in the Home Buyers' Plan,
you must, however, repay the amount you withdrew within a
15-year period in the amount of 1/15 per year. If you repay
less than the amount you should repay, that difference is
then added to your taxable income on your income tax return
and you are taxed at your tax rate.
Free Money for First Time Buyers
How would you like to get free money? Well,
if you are a First Time Buyer or you haven't owned a home
in the last 5 fiscal and you have not previously participated
under the Home Buyers' Plan, here is a strategy to FREE MONEY.
Simply use your unused RSP limit, with your own savings or
getting an RSP loan and keep it for at least 90 days. If you
fall in the 40% tax bracket, on a $3,000 RSP, you would get
a $1,200 income tax refund. Once you are ready to buy, and
90 days have passed, you can remove it under the Home Buyers'
Plan. If you had a RSP loan, simply collapse the RSP and pay
off loan, but you're still getting the income tax refund.
Ontario Home Ownership Savings Plan (OHOSP)
The Ontario government created this program
to encourage first-time homebuyers into the real estate market.
The Plan may be opened at any financial institution, including
the Province of Ontario Savings Office. It is a savings account,
earning interest at the rate the institution is offering,
and since the OHOSP is not a tax shelter, any interest earned
is taxable. Depending on your income, a maximum annual contribution
to the plan could give you an Ontario Tax Credit of up to
$500 ($1,000 per couple) on your income tax return. To qualify,
your net income must not exceed $40,000 ($80,000 per couple).
There is no limit to how much you contribute, but the credit
is based on a maximum contribution of $2,000 ($4,000 per couple)
per year. You may make contributions for up to 5 consecutive
years, and once it's closed, you must purchase within 2 years
The Cash Back Program
How would like to receive 3% of the mortgage
amount cash, paid to you, on closing? That's $4,500 on a $150,000
mortgage. This program is available to everyone, but since
we are discussing first-time home buyers, it could help you
in the following ways: with closing costs, with appliances
or furniture, paying down some other debt, or making a prepayment
on your mortgage, right after closing. The cash back program
can be used by someone who already has a mortgage and if the
rate is considerably higher than the going rate, it pays to
break that mortgage, and use the cash back to pay for the
penalty costs. It's the smart moves like this that again,
stack up to thousands of dollars in savings. A CanadianMortgageRates.com
mortgage specialist could arrange this for you and more.
When raising the downpayment is hard enough,
and then you are faced with having money to close the deal
(usually approximately 1.50% of the purchase price), it used
to mean that home-ownership would come down the road. With
the "AIM mortgage
" your dream could become
a reality. It takes care of everything automatically
For Purchases, it includes: Solicitor's legal fees
and standard disbursements to close the purchase and mortgage;
Title transfer; Title Insurance from LandCanada for the
clients; CMHC application fee or Appraisal fee; 1% Cash-Back
to cover Land Transfer Tax; Registration of Deed and Mortgage.
For Refinances, it includes: Legal fees and standard
disbursements to prepare and close the mortgage; Title Insurance
from LandCanada; CMHC application fee or appraisal fee;
1% Cash-Back; Registration of new first mortgage; Registration
of discharge of existing first and second mortgage. The
minimum term available is a 5 year term. Please call a mortgage
specialist at CanadianMortgageRates.com for further details.