The First-Time Homebuyer’s Guide to Your First Mortgage Meeting

Meeting with a mortgage specialist for the first time can feel intimidating.

 

The purpose of a mortgage meeting is simple: understand what is possible, what feels comfortable, and what your real options look like in actual dollars. Think of it as gathering information, not making commitments.

 

This guide will help you walk into that meeting feeling prepared, ask better questions, and leave with clarity instead of confusion.

 

The Single Most Important Thing to Remember

 

Mortgage specialists will tell you the maximum amount you qualify for. That number is almost always higher, sometimes significantly higher, than what will actually feel comfortable in your real life.

 

Your job is not to find out how big a mortgage you can carry.

 

Your job is to figure out what works for the life you actually want to live. The one where you still travel, save for other goals, go out for dinner without guilt, and sleep soundly at night.

 

The person across the desk will present numbers. Your job is to ask yourself:

“Does this feel right?”

 

If a monthly payment makes you wince, listen to that feeling.

 

The Three Accounts That Actually Matter for First-Time Buyers

 

Before getting into mortgage mechanics, it helps to understand the three account types that come up constantly when buying your first home in Canada.

 

TFSA (Tax-Free Savings Account)

 

This is your most flexible tool.

 

• You can withdraw money at any time, tax-free
• There is no requirement to pay it back
• You do not permanently lose contribution room
• It is liquid, which makes it useful for down payments, emergencies, or future goals

 

RRSP Home Buyers’ Plan (HBP)

 

This program lets first-time buyers borrow from their own RRSP for a down payment.

 

How it works:

 

• Withdraw up to $60,000 from your RRSP tax-free
• You have 15 years to repay it
• Minimum repayment is roughly $4,000 per year
• Miss a repayment and that amount is added to your taxable income

 

Important context: When you withdraw RRSP money through the HBP, you lose the tax-deferred growth on that money until it is repaid. That does not make it a bad choice, but it is a trade-off worth understanding.

 

First Home Savings Account (FHSA)

 

If you are not buying immediately, this is the strongest home-buying savings tool Canada has ever created.

 

• Contribute up to $8,000 per year, lifetime maximum $40,000
• Contributions are tax-deductible, like an RRSP
• Withdrawals for a first home are completely tax-free, like a TFSA
• Growth inside the account is tax-free

 

If your timeline allows for it, maxing out an FHSA before you buy can save you thousands in taxes.

 

Canadian Mortgage Details Most People Are Not Taught

 

A few Canada-specific concepts will come up in your mortgage meeting. Here is what they actually mean.

 

CMHC Insurance (Mortgage Default Insurance)

 

If your down payment is less than 20 percent, you must pay mortgage default insurance.

 

• It protects the lender, not you
• The cost is added to your mortgage balance
• Rates range from roughly 2.8 to 4 percent of the mortgage amount
• On a $300,000 mortgage, that can mean $8,400 to $12,000 added to what you owe

 

This insurance is not optional under 20 percent down. That is simply how Canadian mortgages work.

 

The upside: Reach 20 percent down and you avoid this entirely.

 

The Stress Test

 

Even though you pay interest at today’s actual rate, you must qualify at a much higher rate, usually around 6.5 to 7 percent.

 

This federal rule is designed to ensure you can handle higher payments if rates rise. It reduces how much you qualify for, which can feel frustrating, but it also prevents overextending.

 

Land Transfer Tax

 

Every province charges land transfer tax when you buy. Rates vary by province, with Ontario and BC being the highest.

 

First-time buyers often receive rebates, but you still need cash available at closing. Your lawyer handles the paperwork, but the money must be ready.

 

How Much Should You Put Down?

 

This is where many buyers get stuck.

 

A larger down payment lowers your monthly payment. But it also reduces your financial flexibility.

 

Here is how to think about the trade-offs.

 

Minimum Down (5 to 10 percent)

 

• Keeps more cash accessible
• Requires CMHC insurance
• Higher monthly payments
• Greater flexibility after purchase

 

20 Percent Down

 

• Avoids CMHC insurance entirely
• Reasonable monthly payments
• Still leaves a financial cushion
• Often the best balance for first-time buyers

 

Larger Down (30 to 50 percent)

 

• Lowest monthly payments
• Uses most available cash
• Less flexibility for repairs or life changes

 

A practical approach: Aim for 20 percent if you can do so without draining your savings. Beyond that, decide how much you value lower payments versus accessible cash.

 

Owning a home means covering repairs yourself. Furnaces fail. Roofs leak. Appliances break. Keeping $20,000 to $40,000 accessible after closing is not excessive. It is realistic.

 

What Monthly Payments Actually Look Like

 

Purchase price gets the attention, but monthly cost is what affects your daily life.

 

Approximate numbers on a $400,000 purchase at 4.5 percent over 25 years:

 

• 20 percent down ($80,000): about $1,625 per month
• 30 percent down ($120,000): about $1,420 per month
• 40 percent down ($160,000): about $1,220 per month

 

Now add typical ownership costs:

 

• Property tax: $200 to $400 per month
• Home insurance: $100 to $200 per month
• Utilities: $150 to $300 per month
• Maintenance buffer: about $200 per month

 

Total monthly housing cost often lands between $2,300 and $2,800.

 

A general guideline is keeping housing costs under 30 to 35 percent of gross income. In high-cost areas, some buyers stretch to 40 percent, but it is important to be honest about how that feels.

 

Compare this to your current rent. If the mortgage payment is similar or only slightly higher, you are usually in a sustainable range.

 

Fixed vs Variable Rates

 

There is no universally correct choice.

 

Fixed rate mortgages offer predictable payments and easier budgeting.

 

Variable rates can save money over time but require comfort with uncertainty.

 

The right choice depends on:

 

• Your tolerance for payment changes
• Your financial cushion
• How much stability matters to you

 

Do not choose based on predictions about interest rates. No one knows where rates are going. Choose what lets you sleep at night.

 

Why Flexibility Often Matters More Than the Lowest Rate

 

The lowest rate is not always the best mortgage.

 

Pay attention to:

 

• Prepayment options
• Penalties for breaking the mortgage early
• What happens if you need to sell in a few years

 

A slightly higher rate with better flexibility can save you far more money if life changes.

 

 

Questions Worth Bringing to the Meeting

 

You do not need to ask everything. Focus on what matters to your situation.

 

Big Picture

 

1. Based on my income, what monthly payment would you consider comfortable?
2. What percentage of my gross income would go to housing?
3. What surprises first-time buyers most after purchasing?

 

Down Payment Strategy

 

4. Can you show payment differences at 20, 30, and 40 percent down?
5. How much cash should I realistically keep after closing?
6. If family is gifting money, what paperwork is required?

 

RRSP and HBP

 

7. Can I use my group RRSP for the Home Buyers’ Plan?
8. What does repayment look like if I use the maximum amount?
9. Is there a tax advantage to using RRSP money versus TFSA or gift funds?

 

Flexibility

 

10. What prepayment options do I have?
11. What happens if I need to sell before the term ends?
12. What are the penalties for breaking the mortgage early?

 

Fixed vs Variable

 

13. Given today’s rates, what typically suits someone in my position?
14. What is the worst-case scenario if rates rise?

 

Reality Check

 

15. If you were buying your first home today, what would you do differently?

 

What the Meeting Is Actually About

 

You will leave knowing:

 

• What you qualify for
• What monthly payments look like at different price points
• How much flexibility your finances allow
• What constraints matter most

 

You will not:

 

• Choose a property
• Commit to a down payment
• Sign binding documents
• Make final decisions

 

If anything feels rushed or unclear, it is completely reasonable to say, “I need some time to think about this.”

 

That is not indecision. It is good judgment.

 

After the Meeting

Take note of:

 

• The price range that felt realistic
• The monthly payment that felt comfortable
• How much cash you would have left
• Anything that felt confusing or uncomfortable

 

Give yourself a day or two. Talk it through. Re-run the numbers.

 

Then make decisions based on what supports your life, not what maximizes your borrowing power.

 

Final Thought

 

Buying your first home is not about getting the biggest mortgage or finding a perfect deal.

 

It is about choosing something that fits your life without straining it.

 

The meeting is just the first step. Asking good questions is how you start well.

 

Go in prepared. Leave with clarity. Make choices that let you sleep at night.