Key Mortgage Strategies Advisors Need to Know to Help Their FTHB Clients

First-time homebuyers are facing one of the toughest markets in years, with affordability stretched and program rules that don’t always line up. For financial advisors, understanding the basics of how mortgages, tax shelters, and government incentives interact is essential. These aren’t just rate conversations; they’re opportunities to guide clients through major life transitions and add real long-term value to their net worth.

Clarify “First-Time Buyer” Status Early

Not every client who calls themselves a first-time buyer qualifies for all programs. For example, Ontario’s land transfer tax rebate demands that neither the buyer nor their spouse/common-law partner has ever owned property anywhere in the world. By contrast, the RRSP Home Buyers’ Plan (HBP) and the First Home Savings Account (FHSA) only require that the buyer hasn’t owned or lived in a home they or their partner owned in the last four calendar years. This distinction matters because missing a rebate can mean thousands of dollars lost at closing. Financial advisors should confirm which definition applies in the province or municipality where they plan to purchase their first home before building a plan.

Leverage Registered Plans Strategically

Registered accounts are powerful tools for first-time buyers, but the timing and coordination can be tricky. The FHSA combines the tax deduction of an RRSP with the tax-free growth of a TFSA, and contributions of up to $40,000 (or $80,000 per couple) can be withdrawn tax-free for a qualifying purchase. The HBP allows up to $60,000 per person (or $120,000 per couple) to be pulled from RRSPs as an interest-free “loan” that must be repaid over 15 years. Financial advisers can position these tools to reduce reliance on high-ratio insured mortgages, or to help a client reach the 20% downpayment threshold and avoid default insurance premiums altogether. Pairing both programs can dramatically accelerate a client’s readiness to buy or qualify for the lowest mortgage rates if they can save for a 35% downpayment. While property values are increasing faster than incomes due to Canada’s limited housing supply, aiming for an even bigger down payment through additional pre-authorized contributions (PAC) is advisable.

Build Sustainable Cash Flow Models

A mortgage is more than just a payment; it’s a 25-year debt horizon that can strain cash flow if not carefully managed. Many lenders use Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to test affordability at the minimum qualifying rate (MQR), which is the higher of 5.25% or the contract rate plus 2% (the “stress test”). Financial advisors should model not just today’s mortgage payment, but also add 1% of the property price annually for taxes, plus heating or condo fees where applicable. By building this into a budget now, clients can align their expectations to the reality they’ll face down the road if interest rates climb. For advisors, this means integrating mortgage strategy into the broader financial plan alongside insurance, retirement savings, and debt reduction.

Turning Knowledge into Client Value

Help your first-time buyer clients make better decisions by integrating mortgage planning into your practice. Partner with nesto mortgage experts today to deliver tailored strategies that protect cash flow, maximize tax advantages, and position clients for long-term success.

Why Choose nesto

At nesto, our commission-free mortgage experts, certified in multiple provinces, provide exceptional advice and service that exceeds industry standards. Our mortgage experts are non-commissioned, salaried employees who provide impartial guidance on mortgage options tailored to your needs and are evaluated based on client satisfaction and advice quality. nesto aims to transform the mortgage industry by providing honest advice and competitive rates using a 100% fully digital, transparent, seamless process.

nesto is on a mission to offer a positive, empowering and transparent property financing experience – simplified from start to finish.

Contact our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.