Are You Ready to Buy a Calgary Home?
The Real Minimum Financial Position
You need three things: savings, credit, and income stability. For a $400,000 home in Calgary, the minimum down payment is 5%. That's $20,000, not the $80,000 most people assume. Add $12,000 to $16,000 for closing costs and you're looking at $32,000 to $36,000 total before you start.
Credit score? You don't need perfection. A score of 680+ gets you competitive rates. Anything above 700 is strong.
Income stability matters more than income amount. Two years of steady employment beats a higher salary with job-hopping.
Three Signs You're NOT Ready
No Emergency Fund Beyond Down Payment: You need 3 to 6 months of expenses remaining after closing.
Job Instability or Industry Volatility: Stabilize first if your employment is shaky.
Debt-to-Income Ratio Already Above 35% Before Mortgage: Pay down consumer debt before adding housing debt.
First-Time Home Buyer Programs: RRSP & FTHBI
Calgary first-time home buyers can access government programs that provide up to $35,000 interest-free.
RRSP Home Buyers' Plan (Your $35K Interest-Free Loan)
The RRSP Home Buyers' Plan (HBP) lets you withdraw up to $35,000 from your RRSP tax-free to use as a down payment. If you're buying with a partner, that's $70,000 combined.
You have 15 years to pay yourself back. Starting two years after withdrawal, you must repay at least $2,333 per year (for a $35,000 withdrawal). Miss a payment? That amount becomes taxable income that year.
When It Makes Sense: You have a healthy RRSP balance ($20,000+), you need short-term liquidity, and you have the discipline to rebuild contributions.
The HBP works best when you're already investing in RRSPs regularly and can afford to reduce your retirement savings temporarily. It's not ideal if your RRSP is your only retirement plan or if you struggle with consistent savings habits.
First-Time Home Buyer Incentive (Shared Equity Reality Check)
The FTHBI provides 5% of the purchase price for a resale home (10% for new construction), interest-free, with no monthly payments. You pay it back when you sell or after 25 years.
The Catch: You repay 5% of the property's CURRENT value, not the original purchase price. Buy a $400,000 home, receive $20,000. Five years later, the home appreciates to $500,000. You owe back $25,000, not $20,000.
The government shares in your appreciation. If Calgary's market continues appreciating 3-4% annually, that "free" $20,000 could cost you $25,000-$28,000 to repay in 5-7 years. Run the math carefully before committing.
Combining Programs (The Stacking Strategy)
Here's how a $400,000 home purchase works when stacking programs:
| Source | Amount |
|---|---|
| RRSP HBP withdrawal | $30,000 (couple) |
| Personal savings | $15,000 |
| FTHBI shared equity | $20,000 (5% of purchase price) |
| Total down payment | $65,000 (16.25% down) |
At 16.25% down, you avoid the highest CMHC insurance tier, saving approximately $5,000 in premium costs.
Down Payment Requirements
Minimum Down Payment Math
For homes under $500,000, the minimum down payment is 5%. For homes between $500,000 and $1 million, it's 5% of the first $500,000 plus 10% of the amount above.
| Purchase Price | Minimum Down Payment |
|---|---|
| $400,000 | $20,000 (5%) |
| $550,000 | $30,000 (5% on first $500K + 10% on remaining $50K) |
CMHC Insurance Explained
When you put less than 20% down, lenders require mortgage default insurance.
| Down Payment Range | Premium Rate | Example on $380K Mortgage |
|---|---|---|
| 5-9.99% | 4.00% | $15,200 |
| 10-14.99% | 3.10% | $11,780 |
| 15-19.99% | 2.80% | $10,640 |
Closing Costs: The Hidden $12K-$20K
Typical closing costs on a $400,000 purchase:
| Cost Category | Amount |
|---|---|
| Land title transfer fees | $300-$600 |
| Legal fees | $1,500-$3,000 |
| Home inspection | $400-$800 |
| Title insurance | $200-$400 |
| Property tax adjustment | Variable |
| Moving costs | $800-$2,000 |
| Total | $12,000-$20,000 (3-5% of purchase price) |
House-Hacking: Your Secret First-Timer Advantage
What if your tenant paid half your mortgage? House-hacking means living in a property while renting out a portion of it.
Why First-Time Home Buyers Win at This
| Advantage | Benefit |
|---|---|
| Owner-Occupied Financing | Better rates and lower down payments (5% minimum) compared to investment properties (20% minimum) |
| Rental Income for Qualification | Some lenders allow 50-80% of projected basement suite income to count toward mortgage qualification |
| On-Site Management | You're living there, so tenant issues get handled immediately |
Best House-Hacking Neighborhoods
| Neighborhood | Median Price | Suite Prevalence | 2BR Suite Rent |
|---|---|---|---|
| Martindale | $385,000 | 38% | $1,150/mo |
| Saddle Ridge | $395,000 | 35% | $1,175/mo |
| Taradale | $410,000 | 32% | $1,200/mo |
| Mahogany | $465,000 | 12% | $1,350/mo |
Cash Flow Example: Martindale
For a $385,000 purchase in Martindale with a 5% down payment ($19,250), your monthly mortgage, taxes, and insurance total $2,810. With basement suite income of $1,150/month, your effective housing cost drops to $1,660/month—making homeownership more affordable than many Calgary rentals.
Affordable Calgary Neighborhoods for First-Time Buyers
| Area | Median Starter Home | Basement Suite Rental Rate | Key Feature |
|---|---|---|---|
| NE Calgary | $395,000 | $1,100-$1,300/month | Highest affordability, 35-40% suite prevalence |
| SE Calgary | $465,000 | $1,200-$1,400/month | Newer construction, 18% appreciation (5-year) |
| Airdrie | $365,000 | Similar to Calgary | -$100,000 savings vs Calgary SE (-21%) |
| Okotoks | $385,000 | Similar to Calgary | -$80,000 savings vs Calgary SE (-17%) |
Common First-Time Buyer Mistakes
| Mistake | Why It's Costly | What to Do Instead |
|---|---|---|
| Skipping Home Inspection | You save $600. Three months later, you discover $25,000 in repairs. | Always inspect. Non-negotiable. |
| Buying Illegal Suite Property | Can't legally rent it out. City may force expensive compliance or removal. | Verify legal suite permit BEFORE making an offer. |
| Maxing Out Pre-Approval | No buffer for rate increases, maintenance, or life changes. | Borrow 20-30% below pre-approval maximum. |
| Waiving Financing Condition | If appraisal comes in low, you're legally obligated to buy or lose deposit. | Never waive financing condition unless you have cash reserves to cover appraisal gaps. |
| Ignoring Condo Reserve Fund | Low reserve fund means upcoming special assessment bills. | Review condominium documents before making an offer. |
Your Next Steps
- Get mortgage pre-approval from a broker
- Determine true budget (pre-approval minus 20-30%)
- Identify target communities based on your strategy
- Browse starter homes in Calgary that match your criteria
The best time to buy was when you were financially ready. The second best time is when you are ready NOW.
Disclaimer: This guide provides general education and is not financial advice. Consult licensed professionals before making decisions.