Alberta First-Time Home Buyer Guide
In addition to facing stiff competition in a supply-challenged market, first-time home buyers in Alberta must also save large down payments and adhere to Canada’s strict mortgage guidelines. If interest rates are elevated, this all gets much trickier.
But there are ways to make buying your first home in Alberta a little easier. Some are government incentives that lower the cost of homeownership, others are home buying strategies that can improve your buying power.
Alberta-only first-time home buyer programs
Attainable Homes Calgary
Attainable Homes Calgary (AHC) offers buyers an interesting proposition. They sell homes below market price, but whenever a buyer wishes to move in the future, they must sell it back to AHC at the price they bought it for.
Buyers lose out on appreciation, but for those who prioritize home-ownership, this program can fast-track it.
AHC provides down payment loans for buyers who can come up with $2,000.
First Place Home Ownership Program
First Place is an Edmonton-based program that transforms surplus school sites into townhouses that are then sold to first-time buyers at market prices.
To be eligible, you must:
Have a combined household income under $130,000.
Have a personal net worth of $25,000 or less, excluding RRSPs, your vehicle and your mortgage down payment.
Agree to reside in your unit for the first five years of ownership.
Qualify for a mortgage pre-approval, with or without a co-signer.
One aspect of First Place requires a little clarity. Buyers must pay the City of Edmonton the total land costs associated with their townhouse unit after five years. The intent is to remove the cost of land from your initial home purchase so that you start with a lower mortgage.
Federal assistance for first-time home buyers in Alberta
Home Buyers’ Plan
Using the Home Buyers’ Plan (HBP), you can withdraw up to $60,000, tax-free, from your registered retirement savings plan (RRSP) to put towards your home purchase in Alberta.
You must use funds that have been in your account for at least 90 days, and you must repay any funds you withdraw within 15 years. You have until October 1st of the year following your withdrawal to buy or build your home.
First-Time Home Buyers’ Tax Credit
The First-Time Home Buyers’ Tax Credit, also known as the Home Buyers’ Amount, is a non-refundable credit of $10,000 for first-time home buyers. It results in a tax rebate of up to $1,500.
This isn’t the kind of assistance that will help you buy a house or qualify for a mortgage, but it will make that first year of homeownership a little more affordable.
GST/HST New Housing rebate
If you purchase or build a new house, or significantly renovate your primary residence, you could recoup some of the Goods and Services Tax (GST), or the federal portion of the Harmonized Sales Tax (HST), that you paid.
Different rules apply depending on property type and location, so make sure the new home you have your eye on is eligible for a rebate.
First Home Savings Account
The First Home Savings Account (FHSA) is a way for first-time buyers to accelerate their down payment savings.
The FHSA combines aspects of an RRSP with those of a tax-free savings account. Deposits are tax-deductible, and once they’re in your FHSA, they can be invested in a number of different ways. The earnings from those investments are tax-free.
Generally, you can contribute up to $8,000 each year, but because any unused contribution amount is added to the limit in subsequent years, the maximum amount may vary from year to year. You can deposit up to $40,000 in total to an FHSA.
How to approach the Alberta market as a first-time home buyer
Strengthen your finances
Unless you’re buying your first home with cash, you’ll need a mortgage. Before you apply for a mortgage, you should:
Improve your credit score. If you don’t know your credit score, or haven’t checked it in a while, it’s a good idea to do so. Your credit score represents the risk you pose to lenders. You’ll want to get it as high as possible before applying for a mortgage.
Pay down your debt. Regardless of how strong your credit score is, paying off debt will tell lenders two important things: that you can prioritize your spending and that your money isn’t tied up with credit obligations that might hinder your ability to make mortgage payments.
Build up your down payment.The bigger your down payment, the better off you’ll be. You’ll borrow less, which means paying less interest and posing less of a risk to your lender, who may offer you a better mortgage rate as a result.
Set a home buying budget
Understanding how much house you can actually afford is a critical part of the home buying process. Making an offer on a home you can’t follow through on can trigger both legal and financial nightmares.
You can get a reasonable idea of what you can afford by:
Using mortgage calculators. A mortgage payment calculator estimates your potential monthly payment. A mortgage affordability calculator shows you how much mortgage you can afford based on your income and debt obligations.
Considering closing costs. Closing costs such as legal fees and title insurance can add tens of thousands of dollars to your home purchase. For example, whenever you buy a home in Alberta, you pay a land transfer registration fee, which depends on the price of the home.
Get pre-approved for a mortgage. Getting pre-approved involves a lender reviewing your finances to determine how large a mortgage you’ll be approved for. With a pre-approval letter in hand, sellers will know they can take your offer seriously.
» COMPARE: Current mortgage rates in Calgary, Alberta
Understand how different choices affect your mortgage
You don’t have much power over mortgage rates, but you will have to make several choices that can impact the cost of your home loan, including:
Whether it’s an open or closed mortgage.
If a variable or fixed mortgage rate is better for you.
How long your amortization period should be.
Other details, like a lender’s prepayment privileges and prepayment penalties, are important things to discuss with a mortgage professional.
The bottom line for first-time home buyers in Alberta
Buying your first home in Alberta might be challenging, but it shouldn’t be impossible, especially if you follow these tried and true first-time home buyer tips:
Create a budget to keep your down payment savings on track.
Eliminate any unnecessary spending.
Generate as much income as possible.
Keep an eye on the market to see if competition is heating up or easing.
Get guidance from professionals who understand both the real estate and mortgage landscapes, such as a real estate broker or a realtor.
Frequently asked questions
How much is the down payment on a house in Alberta?
How much is the down payment on a house in Alberta?
Alberta’s down payment requirements are the same as they are elsewhere in Canada, which means a minimum down payment of 5% on properties worth under $500,000. The average price of homes sold in Alberta in December 2024 was $493,828, which would require a minimum down payment of $24,691.
What assistance is there for first-time home buyers in Alberta?
What assistance is there for first-time home buyers in Alberta?
First-time home buyers in Calgary may be eligible for the Attainable Homes Calgary program, while first-timers in Edmonton may be a fit for the First Place Home Ownership Program. Alberta’s first-time home buyers can also look into national programs and products, like theHome Buyers’ Plan or First Home Savings Account.
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Clay Jarvis
Clay Jarvis