Bank of Canada Paused the Policy Rate at 2.25%
The best mortgage for first-time home buyers in Canada in 2026 typically features a 30-year amortization with an insured interest rate.
As of December 15, 2024, first-time buyers can purchase homes valued up to $1,499,999 with a down payment as low as 5% on the first $500,000 and 10% on the portion above that amount. This $1.5 million price cap expansion allows buyers in high-cost markets like Toronto and Vancouver to access lower insured mortgage rates previously reserved for homes under $1 million.
| Home Purchase Price | Minimum Down Payment | Mortgage Type |
| $500,000 or less | 5% of the purchase price | Insured (High-Ratio) |
| $1,000,000 | $75,000 (7.5% effective) | Insured (High-Ratio) |
| $1,499,999 | $125,000 (8.33% effective) | Insured (High-Ratio) |
| $1,500,000+ | 20% of the purchase price | Uninsured (Conventional) |
Lowest rates, expert advice, and savings to guide you through this milestone moment.
Buying your first home is a big deal—and with high rates and affordability challenges, every dollar counts. nesto offers 15% lower rates than the big banks, upfront* to help you save big from day one. We’re here to make the dream happen for all Canadians, stress-free.
of non-homeowners think they will never own a home*. We disagree.
is the average monthly mortgage payment in Canada (stress-tested)*
saved on interest per month if you choose nesto over the “other guys”*
The federal government has introduced new measures to help first-time buyers step off the sidelines and into the market. Here’s a quick guide to the changes—because we’re here to support you every step of the way.
Effective December 15, 2024
All first-time home buyers in Canada are now eligible for 30-year amortizations on insured mortgages for both resale and newly-built homes. This 2024 reform reduces monthly mortgage payments by roughly 8% compared to a traditional 25-year amortization. Based on a $400,000 mortgage at 4.5%, a 30-year amortization lowers the monthly payment by approximately $164, providing significant cash-flow relief for new homeowners. But first, it’s important to weigh the pros and cons.
Effective December 15, 2024
The price limit for insured mortgages has increased from $1 to $1.5 million. Previously, homes above $1 million required a 20% down payment. What does this mean for you? In higher-priced markets like Toronto & Vancouver, this helps buyers qualify for mortgages with a lower down payment.
First-time buyers can withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) & have a lifetime limit of $40,000 to withdraw tax-free from their First Home Savings Account (FHSA). What does this mean for you? These programs are designed to increase access to funds for your down payment.
Home buying can feel like a maze. Skip the rookie mistakes. Learn the ins and outs of homeownership with our simple guide—and chat with a mortgage expert to ensure sure you’re fully ready.
Financial Preparation
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Helpful Tools & Resources
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To qualify as a first-time homebuyer (FTHB), you must not have owned or lived in a home owned by your spouse/common-law partner in the past 4 years. You may still qualify if you’ve rented for 4 years or if your relationship ends.
The federal government recognizes you as an FTHB for default-insured purchases due to a relationship breakdown. You’ll requalify for mortgage insurance and RRSP withdrawals under the Homebuyers’ Plan (HBP) for a spousal buyout after a breakup. However, provincial definitions for FTHB, especially for land transfer tax rebates, may differ if you or your spouse previously owned property.
Mortgage brokers, lenders, and banks each play a unique role in the mortgage process. Brokers connect borrowers with various lenders, including banks and credit unions, to find personalized mortgage options and competitive rates. Lenders, such as banks, provide mortgage funds, though banks typically offer only their own products.
Home Buyers’ Plan (HBP) allows you to withdraw up to $60,000 from RRSP tax-free through the HBP for a down payment, which can be repaid over 15 years.
Through the FHSA, you can save up to $40,000 tax-free for a home purchase, with an annual contribution limit of $8,000.
Recover a portion of GST/HST paid on a new or substantially renovated home.
Claim a non-refundable tax credit of $10,000 under the home buyer’s amount, providing up to $1,500 tax relief for eligible first-time homebuyers.
Provincial rebates are available (e.g., up to $4,000 in Ontario) for eligible first-time buyers.
*Canada Mortgage Trends. *Comparing nesto’s January 2024 to September 2024 5-year fixed insured rates vs the Big 6 bank posted rates, approximately rounded up. Terms & conditions apply. Comparison lenders may offer unpublished special discounts. For insured mortgages. The savings calculation assumes a $500K mortgage, 25-year amortization, and a 5% down payment.
