Tools for financing

Several tools can help you assess your financial situation and thus realize your dream of becoming a homeowner.

Borrowing capacity and pre-approved mortgage

When you start looking for a property, it pays to know your borrowing capacity. That way, you will know which type of property to target during your searches. A good way to do this is to obtain a pre-approved mortgage before you have found your property. With a pre-approved mortgage, you will know the amount you can borrow, the interest rate, and the amount of each payment. That way, you will search for a property that fits your means.

Mortgage loan insurance

You dream of buying a property, but you own less than 20% of the purchase price for the down payment? No problem! Mortgage loan insurance could help you realize this dream... Nowadays, lenders typically require mortgage loan insurance when the borrower makes a down payment of less than 20% of the property's purchase price.

Mortgage loan insurance applies to various types of new or existing properties. It should also be kept in mind that the smaller the down payment, the higher the mortgage payments and the total cost of the purchase will be. Mortgage loan insurance is offered in Canada by the Canada Mortgage and Housing Corporation (CMHC) and by GenworthFinancial Canada.

The Home Buyers' Plan

The Home Buyers' Plan (HBP) is a government program that allows any buyer to use the savings contributed to an RRSP to finance the purchase of a property without having to pay tax on withdrawal. The funds withdrawn must be repaid into the RRSP according to the schedule set by the program.

Neither the buyer nor the spouse must have owned a home that served as their principal residence in the five years preceding the withdrawal request. In addition, the buyer must have entered into a written agreement for the purchase or construction of a property (purchase offer or preliminary contract) before withdrawing funds from the RRSP. For detailed eligibility conditions, contact the Canada Revenue Agency or your financial institution.