First-time buyer questions, answered

Your down payment plus closing costs. On a $650,000 purchase with the minimum 5%/10% down that is roughly $40,000 down, about $5,475 of Ontario land transfer tax after the $4,000 first-time buyer refund, around $2,050 of provincial tax on the mortgage insurance premium, and roughly $4,500 for the lawyer, title, inspection and adjustments: about $52,000 in total. The insurance premium itself is added to the mortgage rather than paid in cash, but the 8% tax on it is not.

Lenders do not qualify you at your actual rate. They use the greater of your rate plus two percentage points or 5.25%, then check two ratios: housing costs must stay under 39% of gross income (GDS) and housing plus all other debt payments under 44% (TDS). Credit cards count at 3% of the balance every month even at 0% promotional interest, which is why card debt shrinks approvals so sharply.

Yes, twice over. The monthly payment is lower, but you pay far more interest across the loan, and on an insured mortgage the insurance premium is 0.20 percentage points higher for amortizations over 25 years. The 30-year option on an insured mortgage is only available to first-time buyers.

Usually not on its own. The lender hands you cash at closing and charges a higher rate for the whole term, which typically costs more over five years than the cash you receive, and it is clawed back if you break the mortgage early. It can still be the right call when it is the only way to cover closing costs. Cash back can never be used as your down payment.

Compare the whole picture. A condo fee covers the roof, exterior and building insurance, but you still pay utilities, unit insurance and in-suite repairs, and fees rise around 3 to 4% a year. A freehold house has no fee but needs a real repairs fund, typically $200 to $550 a month depending on the property. Half of any condo fee also counts against you in the bank tests.