cmhc insurance vs Mortgage insurance
Jordan Hale, CFP is a credit specialist with 12+ years advising Canadian clients on loans, credit building and responsible borrowing. All guidance is for education only.
First Time Home Buyer Guide Canada 2026: CMHC, FTHBI, HBP & Pre-Approval Steps
Selected for this guide
Start with pre-approval, explore FTHBI shared equity, HBP RRSP withdrawal, down payment rules, CMHC insurance. Use Ratehub.ca for mortgage options or provincial sites. Not advice.
Buying your first home in Canada involves planning, government programs like the First-Time Home Buyer Incentive (FTHBI) and Home Buyers' Plan (HBP), pre-approval, and understanding CMHC insurance and closing costs. As of 2026, a FICO score of ~760 is very good (Equifax good range typically 660-724); down payments start at 5% for homes ≤$500k. Always verify with FCAC and your lender.
Key Features
The process starts with assessing affordability (savings + gifts + programs), getting mortgage pre-approval, then house hunting. Key federal programs reduce barriers for first-timers.
- First-Time Home Buyer Incentive (FTHBI): Shared equity; gov contributes up to 5% (existing) or 10% (new build) of purchase price to lower monthly payments; repay on sale or after 25 years.
- Home Buyers' Plan (HBP): Withdraw up to $35,000 from RRSP for down payment tax-free; repay over 15 years starting year 3.
- Provincial incentives: Land transfer tax rebates (e.g. Ontario for eligible first-timers); some provinces offer down-payment assistance grants.
- Mortgage pre-approval & credit: Secure pre-approval early; pull Equifax/TransUnion reports to fix errors and optimize score for best rate.
- Down payment & CMHC: 5% min on ≤$500k, 10% on portion above; default insurance required if <20% down (premium added to mortgage).
Pros & Cons
Pros
- Build equity and long-term wealth vs renting.
- Forced savings via mortgage paydown.
- Freedom to customize and stable housing.
Cons
- Large ongoing costs (mortgage, taxes, insurance, maintenance).
- Market risk and limited mobility.
- Upfront closing costs 1.5-4% of price.
How It Compares
Compare fixed vs variable rates, open vs closed terms, and lender options (banks, credit unions, brokers). Use Ratehub.ca or bank sites; broker can surface better deals without cost to you.
Who It's For
First-time buyers in Canada (no prior ownership or use of FTHBI/HBP) including newcomers establishing credit. Best for those with stable income, 3-6+ months Canadian credit history, and down payment ready.
How to Apply
1. Budget and save (use FCAC tools). 2. Get pre-approved (bank or broker). 3. Engage realtor. 4. Search and offer. 5. Inspect. 6. Finalize mortgage and close.
Responsible steps: larger down payment lowers rate/risk; budget for 1-3% extra costs; set auto-pay; maintain emergency fund.
FAQ
What is the First-Time Home Buyer Incentive (FTHBI)?
Shared equity mortgage: Government of Canada contributes 5% (existing homes) or 10% (new) toward purchase to reduce your payments. Repay on sale/25 years.
What is the Home Buyers' Plan (HBP)?
Withdraw up to $35,000 per person from RRSP for down payment (tax-free). Repay to RRSP over max 15 years.
What credit score for mortgage approval?
680+ recommended for competitive rates; lower possible with higher rate or larger down. Newcomers: focus on secured products first for 3-6 months history.
How much down payment?
5% on first $500k; 10% on amount above $500k up to $1M; 20% over $1M. <20% triggers CMHC insurance premium (0.6-4.5% of loan).
Not financial advice. Rates and offers change. Read provider terms and FCAC guidance.
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View mortgage options →Our Methodology
BGR evaluates Canadian mortgage products using a 6-factor model based on CMHC and FCAC guidelines, updated quarterly.
Data sources: FCAC, CMHC, issuer websites, Equifax Canada, TransUnion Canada. Last audit: June 2026.