First Time Buyers
First time buyers may purchase a home with only 5% down under the following conditions:
- Purchase price is $250,000 or less (in the lower mainland)
- The home must be your primary residence, not an investment property
- Your Gross Debt Ratio cannot exceed 32% of your gross family income
(payments of principal, interest, property tax, heating and 50% of condominium fees) - Your Total Debt Ratio cannot exceed 40% of your gross family income
- CMHC Mortgage Insurance is 3.75% of the mortgage balance. The cost may be added to the mortgage and paid off as part of the mortgage. This insurance is for the sole benefit of the lender but is required by law.
- The down payment must be in the buyer's possession at least 30 days before making an offer and must be from the buyer's own resources or a gift.
- The mortgage term but be at least 3 years, but must be qualified at 5 years or longer
- Good credit rating
- Must have worked at least 1 year at your current job
- Buyers must show that they are able to cover closing costs of at least 1.5% of the purchase price in addition to the 5% down payment at the time of application
- The amortization period is a maximum of 25 years.
First time buyers are exempt from paying the property purchase tax under the following conditions:
- Purchase price is $275,000 or less (in lower mainland)
- Mortgage loan to value ratio is 70% or higher
- Mortgage term must be for 1 year or longer
- Mortgages must be arms length - mortgages held by parents do not qualify
- The maximum amount available for the principal buydown of the mortgage is $11,000
- Buyers must not have owned a home anywhere in the world before
- Buyers must be a resident of B.C. for at least 1 year
- Buyers must reside in the home for at least 1 year after completion
- Exemption applies only on residential properties up to 1.24 acres
This information is being provided to assist in the planning of a home purchase. It is not intended to be legal advice and the information set out may not be applicable in all cases. Each client will be different and it is recommended that the buyer(s) consult with their lawyer or notary public as early as possible to confirm the actual cash requirements necessary to buy a home.