Last updated on May 31, 2024.

Purchasing a home for the first time can be an overwhelming process. There are so many things to think about—from what kind of down payment you need, to what mortgage you can afford, unexpected costs, location, and more. 

So, let’s delve into the key steps involved in kickstarting your journey towards homeownership in BC.

What are the downpayment options for first-time homebuyers?

If you’re a first-time home buyer in BC, you may be eligible for different down payment assistance programs. The most common program is the Canada Mortgage and Housing Corporation (CMHC) Mortgage Insurance program, which allows you to buy a home with as little as a 5% down payment. 

How should I save for a down payment? 

There are many different ways that you can save for a down payment, but some are more advantageous than others.  

You can make contributions to your Registered Retirement Savings Plan (RRSP) and the contribution amounts can be deducted from your taxable income. You can withdraw up to $35,000 tax-free from your RRSP with the Home Buyer’s Plan, but these funds need to be repaid over the next 15 years.  

Another option to save for your down payment would be through a Tax- Free Savings Account (TFSA). In a TFSA, your money can grow tax-free and can also be withdrawn tax-free, but your contributions cannot be deducted from your taxable income.  

Finally, perhaps the best way to save for your first home is through the newly introduced First Home Savings Account (FHSA).  

If you’re a first-time home buyer in BC, you may be eligible for different down payment assistance programs.

What is a First Home Savings Account?

The FHSA has all of the best features of an RRSP and TFSA and combines them all into one new account. Your contributions are tax-deductible just like an RRSP and the money can be withdrawn for your first home, tax-free, without needing to be repaid. Your investment earnings can also grow tax-free within the account similar to a TFSA. This makes the FHSA one of the best ways to start saving for your down payment on your first home. Speak with your investment advisor to find out which account may be best for you.  

What kind of mortgage can I afford?

For those just entering the real estate market, understanding mortgages can feel overwhelming. If you don’t understand how the process works, it may feel like you’re taking on a huge amount of debt.  

The good news is there are many easy-to-use mortgage calculators online that can help you get a general understanding of the kind of mortgage you can afford. Calculators can help you understand how your budget will work within a new mortgage and estimate your payment and amortization schedules. 

Where do I start?

It’s always a good idea to determine how much you are comfortable paying before you buy. We suggest creating a budget to include the estimated costs for your new home, including payments such as a mortgage, strata fees, property tax, utilities, and insurance. Also, try to save these costs in a separate account for at least one to two months to make sure it fits comfortably within your budget and lifestyle. You can create a simple, easy to understand budget on the Government of Canada website. 

To get an official quote, you’ll need to speak with a dedicated financial institution. They’ll be able to tell you exactly what mortgage amount you can be approved for and how to get started with the process. 

What unexpected costs are involved in buying a home?

When saving up for your first home, it’s important to remember that in addition to the down payment, you will need to have extra funds available to pay for closing costs. These can include the property transfer tax and legal fees at the time of your purchase. Luckily, as a first-time home buyer in BC, you may be exempt from property transfer tax on your first home, up to a maximum purchase price of $835,000. This can work out to savings of up to $8,000 on your first home! Talk to your financial advisor to see if you qualify. 

Is location important when buying your first home?

For first-time home buyers in BC, choosing the right location can feel like a daunting task. City living, suburban tranquility, or rural charm—there’s much to consider. Your budget, lifestyle, and proximity to work all play a role. Access to public transit and quality schools may also influence your decision. To streamline your search, make a list of your priorities, from must-haves to nice-to-haves, and use it to narrow down your options. 

If you’re not sure where to start, try entering your desired address into www.walkscore.com. This website will show you how walkable an area is, as well as the public transit options available. 

Get ready to buy your first home in BC!

Now that you know how to prepare for buying your first home, you’re ready to start the process! Your first step should be getting in touch with a dedicated mortgage specialist and locking in your pre-approval.  

Vancity offers efficient mortgage approvals and competitive rates for first-time homebuyers in BC. We return 30% of our net income to members and communities, assisting people with financial literacy, creating affordable housing, and building a global banking alliance. 

Ready to take the next step in your home buying journey? Get in touch with one of our mortgage specialists to help you find the perfect mortgage solution.