Buying your first home in Calgary is one of the biggest financial decisions you will ever make. The good news is that Alberta remains one of the most affordable provinces in Canada for homeownership, and there are several government programs designed to give first-time buyers a meaningful advantage. This guide walks you through everything you need to know — no jargon, no fluff.
Understanding Your Down Payment Options
The minimum down payment in Canada depends on the purchase price of the home. For homes priced at $500,000 or less, you need a minimum of 5% down. For the portion between $500,001 and $1,499,999, you need 10% on that amount. Anything at $1.5 million or above requires 20% down.
Here is what that looks like in practice for Calgary price points:
- $400,000 home — minimum down payment of $20,000 (5%)
- $500,000 home — minimum down payment of $25,000 (5%)
- $600,000 home — minimum down payment of $35,000 ($25K on the first $500K + $10K on the remaining $100K)
- $750,000 home — minimum down payment of $50,000
When your down payment is less than 20%, you will need mortgage default insurance from CMHC, Sagen, or Canada Guaranty. This insurance premium ranges from 2.8% to 4.0% of the mortgage amount and is typically added to your mortgage balance, so you do not need to pay it upfront.
The First Home Savings Account (FHSA)
The FHSA is one of the most powerful savings tools available to first-time buyers in Canada. Introduced in 2023, it combines the best features of an RRSP and a TFSA.
Key details:
- Contribute up to $8,000 per year, with a $40,000 lifetime maximum
- Contributions are tax-deductible, just like an RRSP
- Withdrawals for a qualifying home purchase are completely tax-free
- Unused contribution room can carry forward up to $8,000 (so a maximum of $16,000 in a single year)
- You have up to 15 years to use the account, after which it must be closed or transferred
If you are even considering buying a home within the next few years, opening an FHSA today is one of the smartest moves you can make. Even a $1 deposit opens your contribution room for that calendar year.
The Home Buyers' Plan (HBP)
The Home Buyers' Plan allows you to withdraw up to $60,000 from your RRSP to put toward a qualifying home purchase. If you are buying with a partner who is also a first-time buyer, you can each withdraw $60,000, giving you up to $120,000 combined.
Important rules:
- The funds must have been in your RRSP for at least 90 days before withdrawal
- You must repay the withdrawn amount over 15 years, starting the second year after your purchase
- If you miss a repayment, that year's amount is added to your taxable income
Combining FHSA and HBP
You can use both the FHSA and HBP at the same time. A strategic buyer could accumulate $40,000 in an FHSA and $60,000 through the HBP, giving them $100,000 toward a down payment. That is a game-changing combination that did not exist a few years ago.
The Mortgage Stress Test
Every buyer in Canada, regardless of down payment size, must pass the mortgage stress test. You qualify at the higher of your contracted mortgage rate plus 2%, or 5.25% — whichever is greater.
For example, if your lender offers you a rate of 4.5%, you must prove you can afford payments at 6.5% (4.5% + 2%). This test reduces your maximum purchasing power by roughly 20% compared to qualifying at the actual rate, but it exists to ensure you can handle future rate increases.
How to improve your stress test result:
- Reduce existing debts — car loans, credit cards, and lines of credit all count against you
- Increase your down payment — a larger down payment means a smaller mortgage to qualify for
- Add a co-signer or co-borrower — additional income strengthens your application
- Choose a longer amortization — 30-year amortization is now available for first-time buyers purchasing new builds
Alberta's No Land Transfer Tax Advantage
Here is something many buyers from other provinces do not realize: Alberta does not charge a land transfer tax. In Ontario, buying a $600,000 home costs you $8,475 in land transfer tax alone (plus the City of Toronto adds another tax on top if you are buying there). In BC, that same home costs $8,000 in property transfer tax.
In Alberta, you pay zero. This saves Calgary buyers thousands of dollars at closing and is one of the biggest financial advantages of buying in this province.
The 30-Year Amortization for New Builds
As of late 2024, first-time buyers purchasing a newly built home can now access a 30-year insured amortization. Previously, insured mortgages (those with less than 20% down) were capped at 25-year amortizations.
What does this mean for you? Lower monthly payments. On a $500,000 mortgage at 4.5%, switching from 25 to 30 years reduces your monthly payment by approximately $250. That can make the difference between qualifying and not qualifying for the home you want.
Credit Score Requirements
Most lenders require a minimum credit score of 680 for a conventional mortgage application. Some alternative programs accept scores as low as 600, but you will generally receive better rates and more lender options with a score above 680.
Quick credit-building tips:
- Keep credit card utilization below 30% of your limit
- Never miss a payment — even a single missed payment can drop your score significantly
- Maintain at least two active credit accounts (a credit card and a car loan, for example)
- Avoid applying for new credit in the six months before your mortgage application
Understanding GDS and TDS Ratios
Lenders use two key ratios to determine how much you can borrow:
Gross Debt Service (GDS) Ratio — Your housing costs (mortgage payment, property taxes, heating, and 50% of condo fees if applicable) should not exceed 39% of your gross household income.
Total Debt Service (TDS) Ratio — Your total monthly debt obligations (housing costs plus car payments, credit card minimums, student loans, and other debts) should not exceed 44% of your gross household income.
These ratios are applied at the stress-tested rate, not your actual mortgage rate, which is why the stress test reduces your purchasing power.
Closing Costs: Budget 1.5% to 2.5%
Many first-time buyers focus on the down payment and forget about closing costs. In Calgary, you should budget between 1.5% and 2.5% of the purchase price for closing costs.
Common closing costs include:
- Legal fees and disbursements — $1,200 to $2,000
- Home inspection — $400 to $600
- Property tax adjustment — varies depending on closing date
- Title insurance — $250 to $400
- Mortgage default insurance premium — if less than 20% down (usually added to mortgage)
- Moving costs — $1,000 to $3,000
- Utility hookups and deposits — $200 to $500
On a $500,000 home, plan for roughly $7,500 to $12,500 in closing costs on top of your down payment.
Your Step-by-Step Buying Process
Here is the order of operations I walk every first-time buyer through:
- Get pre-approved — This tells you exactly what you can afford and locks in a rate for 90 to 120 days
- Find a realtor — Work with someone who knows the Calgary market and your target neighborhoods
- House hunt and make an offer — Your pre-approval gives you confidence and credibility with sellers
- Secure financing — Once your offer is accepted, your mortgage application is formally submitted
- Home inspection — Always get one, even on new builds. It protects you from costly surprises
- Conditions removed — Once financing and inspection clear, you remove conditions and the deal is firm
- Lawyer processes the deal — Your lawyer handles title transfer, mortgage registration, and fund disbursement
- Closing day — You get the keys and officially become a homeowner
Final Thoughts
Calgary is one of the best cities in Canada for first-time buyers. You get strong job market fundamentals, no land transfer tax, relatively affordable housing compared to Toronto and Vancouver, and access to every government program available to Canadian buyers.
But the mortgage process has real complexity. The stress test, insurance premiums, GDS/TDS ratios — these are not things you should navigate alone. A mortgage broker who works with 60+ lenders can find you not just the lowest rate, but the right mortgage structure for your specific situation.
If you are thinking about buying your first home in Calgary, start the conversation early. A 15-minute call can save you months of confusion and thousands of dollars.
