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Thinking about becoming a homeowner, but wondering where to start? There are many moving parts in a real estate transaction, which can become overwhelming. Being organized will assist in successfully achieving your goal and we are here to help.

Here is a summary of the steps in involved with achieve your goal of home ownership:


Down Payment + Mortgage Amount = Your Home Purchase Budget

A down payment is a sum of money you will put towards the purchase of the house and therefore helps reduce the amount you will need for a mortgage. Before deciding on the down payment, you should assess your needs and budget for the additional expenses that will be incurred to acquire your home. See below to for more information regarding down payments.

Meet with a Motor City Financial Services Representative to discover what down payment amount will fit your budget and goals. Once this is determined, will review the various type of mortgage products that best suits your needs and we will provide you with a pre-approval of mortgage amount at a specific rate which are usually good for 90 days.

How much can be put down?

The minimum requirement of a down payment in Canada is at least 5% of the price of the home. If your down payment is below 20% of the price of the home you are required to obtain mortgage loan insurance coverage from the Canada Mortgage and Housing Corporation (CMHC) or Genworth Canada. The amount of this insurance is based on the size of the down payment, the smaller the down payment, the higher the premium. This insurance is added onto the mortgage itself and will be part of your payment, it is not required to be paid upfront. If your down payment amount is 20% or more of the purchase price of your home you will not require mortgage insurance and you will save this cost.

What qualifies as a down payment?

The down payment could come from your cash savings, investments, a gift, an inheritance, or even your Registered Retirement Savings Plans (RRSPs) by utilizing the Home Buyers' Plan (HBP).

Home Buyers' Plan at a glance: The Home Buyers' Plan (HBP) is a federal government program designed to make the purchase of a home more accessible by borrowing funds from your RRSPs should you qualify as a first time homebuyer. Currently, you are able withdraw up to $35,000 from your RRSPs to use as a down payment. If you are buying a house with a partner or spouse and they are also considered a first time home buyer, they can take up to $35,000 from their RRSPs too for a potential combined total of $70,000.

A few things to note:

  • You must enter into a written agreement to buy or build a qualifying home
  • Have intentions to occupy the home as a principal place of residence
  • You must be considered a first time home buyer or have had a break down of marriage or common-law partnership
  • On January 1 of the year of the HBP withdrawal, any previous HBP balance must have been repaid
  • The qualifying home must be bought or built before October 1 of the year following the HBP withdrawal
  • Cannot have owned the qualifying home more than 30 days before a withdrawal is made
  • You must be a resident of Canada to qualify
  • The funds must have been held in an RRSP for at least 90 days before they can count as a HBP withdrawal
  • The withdrawal is not taxable
  • You must start repaying your RRSP in the second year following the withdrawal, from there you have 15 years to repay the full amount withdrawn and must pay at least 1/15 each year or be subject to penalties by the CRA.
  • You miss out on the tax-deferred income that this money could have accumulated

Click here to learn more about the Home Buyers' Plan

Don’t have $35,000 in your RRSP but still want to take advantage of the Home Buyers’ Plan? A Motor City RRSP loan could help you—talk to your Financial Services Representative about it.

A good experienced realtor can help you manage your timeline and expectations.  Provide the realtor with what you would like in a home and come up with a list of the must-haves like a specific location, two bathrooms, be a certain school district, a pool, attached garage, etc.  Once you have found the perfect home, your realtor will write up the offer and guide you toward the closing date with Motor City and your lawyer.

Hire a lawyer that is experienced in residential real estate transactions. Your realtor will forward the purchase agreement to the lawyer. The down payment will have to be delivered to the lawyers’ office at the time of signing the legal documents and the credit union will forward the mortgage proceeds to the lawyer.

When buying a house there are often many unexpected costs that come up once you officially purchase your new home. It is important you plan for certain additional expenses when buying a home, here are a few to consider:

Mortgage Transaction Fees

  • House inspection and appraisal fees
  • Provincial taxes on the mortgage insurance premium for homes in Ontario
  • Legal fees

Land Transfer Tax

  • First time Ontario homebuyer’s qualify for a rebate of up to $4,000 for the land transfer tax. Click Here to Learn More

Property Taxes

  • Adjustment for property taxes prepaid by the seller

Other Expenses

  • HST on brand new homes
  • Moving fees
  • Home insurance
  • Life or Mortgage insurance
  • Condominium fees
  • Home improvement (painting, interior decorating, etc.)



Use our mortgage calculator to help determine your budget


Ready to make your dream a reality?