First-Time Home Buyer Guide (BC Edition)

Overview

Metro Vancouver remains one of Canada’s priciest housing markets, yet thousands of residents purchase their first condo or townhome every year. While higher rates and stricter lending rules feel daunting, new federal and provincial incentives—plus the right strategy—can move home ownership within reach. This guide walks you through financing, savings tools, closing costs, and practical next steps tailored to British Columbia.

Key Takeaways

• Minimum down payment is 5% on homes under $500 k and scales up for higher prices.
• OSFI’s stress test requires you to qualify at the greater of the contract rate + 2% or 5.25%.
• B.C.’s First-Time Home Buyers’ Property Transfer Tax (PTT) exemption now applies to fair-market values up to $835 k (phase-out at $860 k).
• You can combine the new $8 k-per-year FHSA with RRSP withdrawals up to $60 k via the enhanced Home Buyers’ Plan.

Financing 101

Get pre-approved early

A written pre-approval locks in a rate for 90–120 days and helps you understand your buying ceiling. Most lenders will check your gross debt service (GDS) and total debt service (TDS) ratios, aiming for ≤ 39% and 44% respectively.

Understand the stress test

Since 2021, federally regulated lenders must use the Mortgage Qualifying Rate—currently the greater of 5.25% or your contract rate + 2%—to ensure you can handle future hikes.

Amortisation & insured mortgages

As of 2024, first-time buyers of new builds may access 30-year insured amortisations, and the insured price cap rose to $1.5 million. Longer amortisations lower monthly payments but raise total interest—run the numbers with your broker.

Your Down Payment

Canada’s minimums are:

• 5 % on the first $500,000
• 10 % on the portion from $500,001–$1,499,999
• 20 % on $1.5 million +

Anything under 20 % triggers mortgage default insurance (CMHC, Sagen, or Canada Guaranty). Premiums start at 4 % on 5 % down and decline as your down payment increases.

Saving faster

Tax-Free First Home Savings Account (FHSA). Opened in 2023, it allows $8 k per year, lifetime $40 k, with tax-deductible contributions and tax-free withdrawals for a qualifying purchase.

Home Buyers’ Plan (HBP). Budget 2024 boosted the RRSP withdrawal limit to $60 k (repay over 15 years).

You can stack FHSA and HBP plus a TFSA to supercharge your down payment.

Government Incentives & Rebates

Property Transfer Tax (PTT) Exemption

B.C.’s First-Time Home Buyers’ Program exempts PTT on the first $500 k if the home’s fair-market value is ≤ $835 k; a partial exemption applies up to $860 k. You must occupy within 92 days and keep it your principal residence for a year.

GST New-Housing Rebate

If you buy a pre-construction unit under $450 k you may recover some or all of the 5 % federal GST. Ask your lawyer to file the rebate on completion.

CMHC First-Time Home Buyer Incentive

This shared-equity program is slated to wind down; ensure funds are still available before counting on it.

Closing Costs & “Day-Of” Cash

• Deposit (due at accepted offer): usually 5 % of price, credited toward your down payment
• Appraisal: $350–$500
• Home inspection: $500–$750
• Legal/notary fees: $1,200–$1,800 plus GST
• PTT: 1 % on first $200 k, 2 % on $200 k–$2 million, 3 % above, unless exempt
• CMHC insurance premium: added to mortgage or paid up front
• Utility hookups & movers: budget ~$1,000

For an itemised worksheet, see !INSERT LINK: Mortgage Checklist!.

Step-by-Step Timeline

1. Months 0–3: Open an FHSA, top up RRSPs before the March 1 deadline, and meet a mortgage broker.
2. Month 3: Secure pre-approval and decide on neighbourhoods.
3. Months 4–6: Tour listings using our !INSERT LINK: Tour Checklist! and compare strata minutes.
4. Offer week: Pay the deposit and schedule inspection.
5. Subject removal: Satisfy financing, insurance, and inspection conditions—see !INSERT LINK: Subject Removal Explained!.
6. Completion day: Sign with your lawyer, wire remaining funds, and grab the keys.

FAQs

Q: What credit score do lenders prefer?
A: Most “A” lenders look for 680 +; some will accept 620 with a larger down payment.

Q: Can I use gifted funds?
A: Yes—immediate family can gift your down payment, but lenders require a signed gift letter.

Q: Will buying with a partner affect my first-time status?
A: If either purchaser owned a principal residence, only the qualifying buyer’s share may get the PTT exemption.

Q: How soon do I need fire insurance?
A: An insurance binder naming the lender must be in place before completion; condo buyers need strata deductible coverage.

Next Steps

Ready to crunch numbers? Download our !INSERT LINK: Mortgage Checklist!, connect with a broker, and start tracking listings. Vancouver’s market moves fast, but informed buyers move faster.

This guide provides general information only and may not reflect the latest regulations or market conditions. It is not legal or financial advice. Always verify details and consult qualified real-estate, mortgage, and legal professionals before making decisions.