First-Time Homebuyer Mortgage Guide for Peterborough Residents

Buying your first home in Peterborough is an exciting milestone—but navigating mortgages and financing can be confusing. This guide is designed to simplify the process, providing practical tips, local resources, and strategies to make your first home purchase a smooth and stress-free experience.

1. Determine Your Budget

Before searching for homes, figure out what you can realistically afford. Consider:

• Monthly housing costs should generally be no more than 39% of your gross income.
• Total monthly debt payments (credit cards, car loans, student loans) should ideally be under 44% of your income.
• Use online calculators or consult with a mortgage broker to estimate your budget, including property taxes, utilities, and insurance costs.

2. Understand Down Payment Requirements

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

• 5% for homes up to $500,000
• 10% for any portion above $500,000 (up to $1.5 million)

Example: For a $600,000 home:

• 5% of $500,000 = $25,000
• 10% of the remaining $100,000 = $10,000
• Total minimum down payment = $35,000

Saving for a larger down payment can reduce monthly payments and mortgage insurance costs.

3. Get Pre-Approved for a Mortgage

A mortgage pre-approval:

• Confirms how much a lender is willing to loan.
• Shows sellers you’re serious, giving you an advantage in competitive markets.
• Includes a mortgage stress test, ensuring you can handle payments at a rate 2% higher than your approved rate or at 5.25%, whichever is greater.

Pre-approval helps you shop confidently for homes within your budget.

4. Take Advantage of Federal Incentives

First-time homebuyers in Canada have access to several helpful programs:

• Home Buyers’ Plan (HBP): Withdraw up to $60,000 from your RRSP tax-free for a home purchase. Must repay over 15 years.
• First Home Savings Account (FHSA): Save up to $40,000 tax-free, with contributions deductible from income.
• Land Transfer Tax Refund: Receive up to a $4,000 refund for first-time buyers in Ontario.
• GST/HST New Housing Rebate: Potential rebate if buying a newly built or significantly renovated home.
• First-Time Home Buyer Tax Credit (HBTC): Non-refundable tax credit worth up to $750.

These programs can significantly reduce upfront costs and make your first home more affordable.

5. Explore Local Peterborough Programs

Peterborough also offers local initiatives for first-time buyers:

• Habitat for Humanity Peterborough & Kawartha Region: Provides affordable housing for eligible applicants.
• City Programs: Occasionally, the city launches initiatives to support homeownership and renovations—check the official City of Peterborough website for updates.

Leveraging local programs can help you reduce costs and access unique opportunities not available elsewhere.

6. First-Time Homebuyer Checklist

1. Calculate your budget and assess affordability.
2. Save for a down payment using RRSP, FHSA, or HBP.
3. Obtain a mortgage pre-approval and pass the stress test.
4. Work with a local mortgage broker familiar with Peterborough.
5. Apply for applicable rebates and tax credits.
6. Investigate local housing programs and incentives.
7. Plan for closing costs: legal fees, home inspection, and property taxes.

7. Why Work with a Peterborough Mortgage Broker?

Local brokers offer benefits that banks often can’t match:

• Access to multiple lenders and exclusive mortgage options.
• Knowledge of programs and incentives available in Ontario and Peterborough.
• Guidance through paperwork, approvals, and budgeting.

A broker can help first-time buyers navigate financing, saving them time and money.

8. Avoid Common Mistakes

• Underestimating costs: Include property taxes, insurance, and closing fees.
• Ignoring future rate increases: Stress-test scenarios matter.
• Missing out on savings tools: FHSA, HBP, and RRSP withdrawals can reduce upfront expenses.
• Relying on outdated programs: Certain incentives, such as the First-Time Home Buyer Incentive, are no longer available.

Final Thoughts

Buying your first home in Peterborough is achievable with the proper preparation and knowledge. This guide gives you the key steps:

• Know your budget and save strategically.
• Get pre-approved and plan for stress testing.
• Use federal and local programs to reduce costs.
• Work with experienced mortgage professionals in Peterborough for personalized guidance.

By following these steps, first-time buyers can approach the Peterborough housing market with confidence and security.