Margaret Zalewski

•  Start early to save money for down payment. The more time you must save and invest your money, the easier it will be to reach your savings goal. Stay focus to save 20% of downpayment to qualify for better interest mortgage rate.
• Build a credit history by getting a credit card and making all your payments on time. This is also a good strategy if you are new to Canada and looking to buy first house in the future.
• Open FHSA. Tax-free savings account it allows contributions up to $8,000 per year, for a lifetime contribution total up to $40,000
• towards a qualifying home purchase. FHSA contributions you make are tax- deductible (like RRSP).
• Save money for HBP by contribution to an RRSP. With the HBP program individuals can borrow a maximum of $60,000 from an RRSP towards the first home purchase. If both spouses are eligible, they could combine the downpayment up to $120,000. The amount borrowed from RRSP is tax-free for the first-time home purchase as long as the repayment schedule is followed, and the loan is paid back into RRSP account within 15 years.
• Combining the Home Buyers' Plan (HBP) and First Home Savings Account (FHSA) is a way to save tax-free for a down payment on your first home purchase. $60,000 from the HBP, and $40,000 from the FHSA, a person will be able to contribute $100,000. For a couple this gives them a combined total of $200,000 toward downpayment. but the amount could be higher if both FHSA accounts have benefited from capital growth.
• Hire a professional tax consultant to be sure you follow the rules to avoid unexpected tax consequences.
• Contact mortgage broker to search multiple lender options and get pre-approval for best mortgage rate. It is free and it helps you make an offer to purchase as soon as you find the dream home. 

• Start to prepare for your mortgage removal few months in advance
• Check your credit score. Use your credit cards and make your payments in full on time.
• Work on your monthly budget and cash flow based on your family income and expenses to see the impact on your household expenditures.
• Find a way to cut back on discretionary expenses, to see if you can make up some of that difference.
• Reduce payment shock and make a lump sum payment when renewing your mortgage or move to biweekly payments instead of monthly.
• Consider taking some funds from TFSA to pay down the mortgage. It is about comparing your current mortgage rate and interest rate on your investments.
• File your taxes up to date, last two years of your NOA will be required.
• Don’t wait until you receive the renewal letter from your lender. If you don’t act, the renewal of your mortgage term may be automatic.
• You don’t have to renew your mortgage with the same lender. You can move your mortgage to another lender if their conditions better suit your needs.
• Contact mortgage broker early for multiply lender options and to get the best interest rate and conditions of your new mortgage.

Sincerely,

                Margaret Zalewski

Dear Reader,

New housing policies came into effect and leaving many Canadians unclear about how their finances have been affected.

“To lower the cost of downpayments, effective today, December 15, 2024, the federal government has increased the $1 million price cap for insured mortgages to $1.5 million. For example, a minimum downpayment on a $1.4 million home would now be up to $165,000 lower. This is helping more Canadians, especially younger generations, get those first keys of their own.

To lower monthly mortgage payments by hundreds of dollars, the federal government’s reform to make 30-year amortizations available to all first-time home buyers and to all buyers of new builds will also come into force today. This will reduce the cost of monthly mortgage payments so that more Canadians can afford a mortgage as they start their career and work their way up the salary ladder.” December 15, 2024 - Ottawa, Ontario - Department of Finance Canada