The Best Mortgage Options for First-Time Buyers in 2025

As a first-time homebuyer, finding the right mortgage can make all the difference in your journey to homeownership. With so many options available, understanding the pros and cons of each can help you choose the best fit for your financial situation and long-term goals.

Here’s an overview of the top mortgage options for first-time buyers in 2025 and how I, Lisa Cipparone, can guide you through the process.

1. Fixed-Rate Mortgages

A fixed-rate mortgage offers consistent monthly payments over the life of the loan, making it a popular choice for first-time buyers.

• Advantages: Predictable payments, stability, and protection against rising interest rates.

• Best For: Buyers planning to stay in their home for a long time or who prefer financial predictability.

• Considerations: Fixed-rate loans often have slightly higher initial interest rates than variable options.

Let me connect you with trusted lenders who can help you secure a competitive fixed-rate mortgage.

2. Variable-Rate Mortgages

Variable-rate mortgages (also called adjustable-rate mortgages) offer lower initial interest rates, but the rate can fluctuate over time.

• Advantages: Lower starting payments, which can help with affordability.

• Best For: Buyers who plan to move or refinance within a few years.

• Considerations: Payments can increase if interest rates rise, so it’s essential to plan accordingly.

We’ll discuss whether this option aligns with your goals and risk tolerance.

3. First-Time Buyer Incentives

In 2025, first-time buyer programs in Canada continue to make homeownership more accessible.

• First-Time Home Buyer Incentive: A shared equity program where the government helps with a portion of your down payment, reducing monthly payments.

• Land Transfer Tax Rebate: Ontario offers rebates to first-time buyers, saving thousands at closing.

• RRSP Home Buyers’ Plan: Borrow up to $35,000 from your RRSP to use toward your down payment.

I’ll help you explore these programs and determine which ones you qualify for.

4. High-Ratio Mortgages and CMHC Insurance

For buyers with a smaller down payment (less than 20%), a high-ratio mortgage is a common choice.

• Advantages: Allows you to buy a home with as little as 5% down.

• Considerations: Requires mortgage default insurance through CMHC, which adds to your costs but makes homeownership possible sooner.

I’ll guide you through understanding these costs and how they impact your budget.

5. Short-Term vs. Long-Term Amortization

Amortization refers to how long it will take to pay off your mortgage.

• Short-Term: Higher monthly payments but less interest paid over time.

• Long-Term: Lower monthly payments, which can help with affordability, but more interest overall.

We’ll review your financial goals to determine the best amortization term for you.

6. Pre-Approval Is Key

Before you start house hunting, getting pre-approved for a mortgage is essential.

• Why It Matters: Pre-approval shows sellers you’re serious, defines your budget, and locks in an interest rate for a set period.

• How I Can Help: I’ll connect you with trusted mortgage brokers and ensure you’re prepared to make a strong offer.

Choosing the right mortgage is one of the most important steps in your home-buying journey. As your realtor, I’ll provide personalized guidance and connect you with professionals who can make the process seamless. Together, we’ll find the mortgage option that fits your needs and helps you achieve your dream of homeownership.