How many residential mortgages can I have?

The number of mortgages you can have is unlimited. Rather, people are constrained by their capacity to manage several mortgages or their financial status. First and second mortgages are two mortgages that are typically held concurrently on a same property.

What is a second mortgage Canada?

Second mortgage is a second loan or funding you take on your residential property. Interest rates on second mortgages are usually higher than first mortgages and you need to pay both your mortgages at the same time.

What is a conventional mortgage Canada?

A conventional mortgage in Canada is a loan where the down payment is at least 20% of the property's purchase price. This means that the loan amount is 80% or less of the property's value.

How long can you mortgage a home in Canada?

In Canada, you can mortgage a home for 25 years. If you are a first-time buyer or purchasing a new build you can mortgage it for 30 years. These rules took effect on December 15, 2024.

Can I buy a home with less than a 20% down payment?

The minimum amount you need for your down payment depends on the purchase price of the home. If your down payment is less than 20% of the price of your home, you'll typically need to buy mortgage loan insurance. If you're self-employed or have a poor credit history, your lender may require a larger down payment.

Should I choose a fixed rate or variable rate mortgage?

Interest rates either rise or fall. But a study suggests that homeowners with a variable mortgage fair better than a fixed rate one.

12 May The Ultimate Guide to First-Time Home Buyer Mortgages in BC

Posted at 10:16h in First Time Homebuyer Mortgage by Satbir Bhullar

Buying your first home is a major milestone — and one of the biggest financial commitments you’ll make. For residents of Abbotsford, Surrey, and nearby areas in British Columbia, navigating the mortgage process can be overwhelming, especially with changing government policies, rising home prices, and stricter lending rules.

The good news? As a first-time home buyer in BC, you may qualify for specialized mortgage programs, tax rebates, and more flexible lending options that can make homeownership more achievable — if you plan ahead.

This guide breaks down everything you need to know to confidently approach your first home purchase, including how mortgages work, how to qualify, and which financial programs are available to help.

What Is a First-Time Home Buyer Mortgage?

A first-time home buyer mortgage isn’t a special product on its own — it refers to a standard mortgage loan combined with specific incentives or programs available to buyers who meet the criteria of being first-time purchasers. These may include:

Lower minimum down payments
Federal or provincial tax credits
Access to insured high-ratio mortgage products
Down payment support programs (e.g., RRSP withdrawals, equity sharing)

If you’re buying a home and haven’t owned a property in the last four years — or ever — you may qualify for multiple programs under the first-time buyer definition.

How Much Down Payment Do You Need?

In Canada, the minimum down payment depends on the price of the home:

5% on the first $500,000
10% on the portion between $500,000 and $999,999
20% if the home costs $1 million or more (no CMHC insurance allowed)

For example, if you’re buying a $700,000 home in Surrey, you’d need:

5% of the first $500,000 = $25,000
10% of the next $200,000 = $20,000
Total: $45,000 minimum down payment

This is the minimum required to qualify for an insured mortgage (one backed by CMHC, Sagen, or Canada Guaranty).

What Is the Mortgage Stress Test?

The mortgage stress test ensures borrowers can handle their payments if interest rates rise. To qualify, your lender will check if you can afford payments at the greater of:

Your contract rate + 2%, or
The current Bank of Canada benchmark rate (around 5.25%–5.75%)

This applies to all buyers, even those with large down payments. It’s one of the most common barriers first-time buyers face — especially in high-cost markets like Abbotsford or Langley.

To improve your qualifying power:

Pay down debts before applying
Consider a longer amortization
Use part of your RRSPs as a down payment

What Incentives Are Available for First-Time Buyers in BC?

As of 2025, first-time home buyers may be eligible for several helpful programs, including:

GST Exemption for Homes Under $1 Million

Expected to be confirmed in the 2025 federal budget, this exemption would eliminate GST on new homes under $1 million purchased by first-time buyers. This could save up to $50,000 on a new build in Surrey or Chilliwack.

(More details: GST Exemption Is Just the Beginning: What More Can First-Time Buyers Expect?)

Home Buyers’ Plan (HBP)

You can withdraw up to $35,000 tax-free from your RRSP (or $70,000 per couple) to use toward your down payment. You’ll need to repay the amount over 15 years.

First-Time Home Buyers’ Tax Credit

This non-refundable tax credit provides up to $1,500 in tax savings, available through your income tax return the year you buy your home.

BC Property Transfer Tax (PTT) Exemption

First-time buyers may be exempt from PTT on homes under $500,000, with partial exemptions up to $525,000. This can save thousands in closing costs.

How Much Can You Afford?

Before searching for homes, determine your mortgage affordability based on:

Your gross income
Monthly debts (credit cards, car loans, etc.)
Available down payment
Current interest rates

Most lenders use two calculations:

GDS (Gross Debt Service Ratio): Should be ≤ 35%
TDS (Total Debt Service Ratio): Should be ≤ 42–44%

For example, if you earn $90,000 annually and have minimal debt, you may qualify for a home around $600,000–$700,000, depending on your down payment.

A mortgage broker can help calculate this for you — factoring in local real estate trends in areas like South Surrey, East Abbotsford, or Langley Township.

Should You Get Pre-Approved First?

Absolutely. A mortgage pre-approval gives you:

A locked-in rate for 90–120 days
Clarity on what you can afford
A stronger position when making offers
Confidence to shop in your true price range

With inventory rising in many Fraser Valley markets, pre-approved buyers are better positioned to act quickly when they find the right property.

FAQs: First-Time Home Buyer Mortgages in BC

Q1. Am I considered a first-time home buyer if I owned a home in the past?

Yes — in some cases. If you haven’t owned a home in the last four calendar years, you may still qualify under the federal government’s definition. You’re also eligible if you’ve recently gone through a breakdown of a marriage or common-law partnership, even if you previously owned property.

Q2. Can I buy a home with less than 20% down?

Yes. Many first-time buyers use a 5%–10% down payment to purchase a home. Mortgages with less than 20% down are insured by CMHC, Sagen, or Canada Guaranty, and they typically have competitive rates — especially for buyers with strong credit and stable income.

Q3. Should I choose a fixed or variable rate?

This depends on your risk tolerance. In 2025, fixed mortgage rates are more popular due to rate stability and long-term affordability. But if you’re comfortable with some payment fluctuation, variable rates may offer short-term savings. A mortgage advisor can help compare both options in real time.

Q4. What credit score do I need?

Most lenders look for a minimum credit score of 600–680 for insured mortgages. A score above 700 will typically get you access to the best rates. If your score is below this, a broker can help guide you through credit improvement strategies or look into alternative lending options.

Q5. What closing costs should I prepare for?

Aside from your down payment, budget for:

Legal fees: $1,000–$2,000
Appraisal (if required): ~$400
Title insurance and adjustments
Property Transfer Tax (unless exempt)

A good rule of thumb: save 1.5%–3% of your purchase price for closing expenses.

First-Time Buyer Mistakes to Avoid

Not Getting Pre-Approved

Without pre-approval, you risk falling in love with homes outside your budget — or missing out in competitive bidding scenarios.

Draining Your Emergency Fund

Don’t use every dollar for your down payment. Keep cash reserves for closing costs, moving expenses, and unexpected repairs after you move in.

Focusing Only on Rate

The lowest rate isn’t always the best deal. Consider prepayment options, penalties, portability, and service quality when choosing a lender.

Skipping Professional Guidance

Trying to do it all yourself can cost you time and money. Mortgage brokers can simplify the process, find better options, and help you avoid missteps.

(Related post: FAQs You Must Ask Your Mortgage Broker)

Where Are First-Time Buyers Buying in BC?

In Abbotsford, Surrey, Langley, and surrounding areas, many first-time buyers are drawn to:

East Abbotsford – family-friendly neighbourhoods with good schools and value pricing
Clayton & Fleetwood in Surrey – growing communities with townhomes and condos
Aldergrove & Mission – more space and affordability for young couples and new families

The rise of new developments, secondary suite incentives, and the upcoming GST exemption are all increasing supply for entry-level buyers in these areas.

Final Thoughts: Start Smart to Build Long-Term Equity

Buying your first home in BC doesn’t have to be stressful. With the right preparation — and the right people on your side — you can confidently secure financing, understand your responsibilities, and move toward building wealth through real estate.

Your mortgage is more than a loan — it’s a tool to build security, equity, and stability for your future.

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