Alberta first time home buyer benefits


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So, you’re buying your first home. Super exciting stuff. As a first time home buyer, there are a lot of exciting steps you’ll be taking – and we’ll be here to help you along the way through the entire experience.

Guide to buying a home

We know it can be a lot. So, we’re here to lighten the (mental) load, and help you be prepared.


Down Payment

How much you need

• If you’re purchasing a home under 500K, your down payment needs to be at least 5%

• If you’re purchasing a home that’s more than $500,000 and less than $1 million the minimum down payment is 5% on the first $500,000 plus 10% of the remaining balance

• If you’re purchasing a home that’s $1 million or more, the minimum down payment is 20%


How to come up with a down payment

Savings
Maybe you have savings in place already specifically for this reason. If so, nice work! But if you’re like most Canadians, you may need to rely on other sources for your down payment...
Gift
There are some mortgage lenders that will allow your down payment to come from a gift from an immediate family member. This is a really common source of down payment, especially for the millennial generation, and is a great way to get into the market.

Home Buyer’s Plan (HBP): If you’re using your RRSP for a down payment, you can withdraw up to $25,000, without paying a tax penalty if you’re a first time home buyer. You’ll need to begin to repay your RRSP two years after you’ve withdrawn the money. You’ll have 15 years to repay the funds. Make sure you meet all the requirements to participate in the HBP. You can read all of them here.

Property Registration/Mortgage Registration Fee

Unlike other provinces, Alberta doesn’t have a property transfer tax. Instead, there’s a property registration fee and a mortgage registration fee.

How it works:

You’re charged $50 plus $1 for each $5,000 of the house value.

For example:

Say you’re buying a $350,000 home. The property registration fee would be $120 ($50 + $70...the $70 is calculated by dividing the home value by $5,000).

So, for that same home. Say your down payment is 20%, which would be $70,000. You’ll have to pay a mortgage registration fee on the mortgage amount. In this case the fee would be $106 ($50 + $56….same calculation. The $56 is calculated by dividing the down payment amount by $5,000).

So your total would be $226.

Phew! We know that’s a whole lot of info. Don’t worry you don’t have to memorize the above, we’re going to be here along the way to help you with all the details. And, if you’re still have questions, concerns, just feel like chatting, our Mortgage Specialists know the ins and outs and are here to help. You can Live Chat with them, or shoot them an email here.

Ready to apply for that mortgage? (exciting!)


The information provided in this blog is for information purposes only, you should consult a mortgage professional for more detailed information. E. & O. E.
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Alberta MogoMortgage is offered by Mogo Mortgage Technology Inc. o/a MogoMortgage.
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