Everything I wish every first-time buyer knew before we started looking. Pre-approval, the FHSA, the RRSP Home Buyer Plan, the GST rebate on new builds, and the closing-day costs nobody seems to mention until you are already three weeks in.
This is a long one. Take it in chunks if you have to. By the time you reach the end you will have a real working understanding of what buying a first home in greater Fredericton looks like, what it costs, and where the traps are.
Before you look at a single home, you need to know what you can actually afford. Not what a website calculator told you. What a real lender, looking at your real income and your real debts, will actually approve.
The pre-approval process takes a couple of days with a good mortgage broker. You provide pay stubs, two years of tax filings, statements for any debts, and a few signatures. The broker pulls credit, runs the numbers against the qualifying rate (currently the contract rate plus 2%, or 5.25%, whichever is higher), and gives you a maximum.
Two things matter here.
The maximum is not the goal. Just because the lender will approve you for $480,000 does not mean you should buy at $480,000. You need to live in the home, run the heat, eat food, and still have a life. I usually counsel buyers to land 10% to 15% below their max, which gives them room for taxes, insurance, maintenance, and the inevitable surprise.
Get a rate hold. A real pre-approval comes with a 90 to 120 day rate hold from the lender. That protects you against rate increases while you shop. If rates drop, you can usually still capture the lower rate. Always ask the broker to confirm the hold in writing.
The First Home Savings Account is the most generous savings vehicle the federal government has rolled out for first-time buyers in a generation. If you are a first-time buyer in your 20s, 30s, or 40s, and you do not have one open, that is the move.
Here is the structure. You can contribute up to $8,000 per year, with a lifetime cap of $40,000. Contributions are tax-deductible, like an RRSP. Withdrawals for a qualifying first home purchase are tax-free, like a TFSA. So you get both the deduction on the way in and the no-tax on the way out. Nothing else in the Canadian tax code does both.
If you and a partner both contribute, you can deploy up to $80,000 toward your down payment, all tax-advantaged. That is real money on a Fredericton home where the median sits under $400,000.
The catch: you need to open the account in a year you have contribution room, and you need to use it within 15 years. Open the account even if you cannot fund it fully right away. Opening creates the contribution room going forward.
The HBP lets first-time buyers withdraw up to $60,000 from their RRSP toward a home purchase, tax-free, with the requirement that you pay it back over 15 years. If you have already accumulated meaningful RRSP savings, this is a way to deploy that capital without the immediate tax hit a normal withdrawal would trigger.
The interaction with the FHSA is the part most buyers get wrong. You can use both, in the same purchase, on the same day. So a couple with strong RRSPs and full FHSA contributions can stack $80,000 in FHSA plus $120,000 in HBP for a $200,000 down payment, all tax-advantaged. That is a different conversation than buying with $20,000 saved.
If you are buying new construction or a substantially renovated home, you are paying GST and HST on the purchase price. In New Brunswick that is 15% (5% federal GST plus 10% provincial HST). On a $400,000 home that is $60,000 in tax, which is built into the purchase price by the builder.
The federal GST New Housing Rebate gives you back up to 36% of the federal portion if the home is under $350,000, with a sliding scale up to $450,000 above which the federal rebate phases out entirely. The New Brunswick provincial rebate is structured differently. Sometimes the builder collects and remits on your behalf and the rebate is already netted in the price. Sometimes you apply yourself after closing.
Always read the agreement of purchase and sale carefully on a new build. The line about whether the price is inclusive or exclusive of GST and HST and rebates is the line that matters. I will walk through it with you before you sign anything.
This is the one that catches out-of-province buyers every time. New Brunswick charges a 1% land transfer tax on the assessed value or the purchase price, whichever is greater, paid at closing. On a $400,000 home that is $4,000 you need to bring to the lawyer.
There is no first-time buyer exemption in New Brunswick like there is in Ontario or B.C. Budget for it.
Beyond the down payment, here is what you actually need cash for at closing.
Land transfer tax. 1% of purchase price, as above.
Legal fees and disbursements. Typically $1,500 to $2,500 depending on complexity. Title insurance is part of this. Always required by the lender.
Home inspection. $500 to $700 for a single-family home. Money well spent. Pay it.
Insurance. The lender will require home insurance bound and paid for the day of closing. Typical premium for a single-family home in Fredericton runs $1,200 to $2,000 annually depending on age, location, and oil-tank status.
CMHC default insurance, if down payment is below 20%. This is added to the mortgage amount, not paid out of pocket. But you also pay the New Brunswick provincial sales tax on the CMHC premium at closing, which can be $300 to $1,000 depending on the loan size.
Property tax adjustment. The seller has prepaid some property tax through the end of the calendar period. You reimburse them at closing for your share. This can be a few hundred to a couple thousand dollars depending on timing.
Moving costs and immediate repairs. Always more than you think. Budget $2,000 to $5,000 for moving, paint, locks, and the things you discover on day one.
Add it all up and a buyer purchasing at $400,000 with 10% down should have closing-day liquid cash of roughly $46,000 to $52,000, including the down payment. That is the real number.
Things I have to explain almost every time, especially to buyers coming from Ontario, Quebec, or out of Atlantic Canada.
Oil tanks. If a home has an oil tank, age and material matter for insurance. A 20 year old steel tank is a problem. Many insurers refuse coverage entirely on tanks past a certain age or material. Always ask before falling in love. We can usually negotiate a tank replacement as a condition of sale.
Wells and septic systems. A surprising number of homes inside city limits are still on private well or septic. We test water and inspect septic as part of due diligence. Septic replacement on a problem system runs $15,000 to $30,000, so this is not an academic concern.
Heat type. A baseboard-electric house and a heat-pump house operate at very different costs even at the same square footage. Always pull a year of utility bills before committing.
Spring flooding. The St. John River runs through Fredericton, and some streets in low-lying areas flood in freshet. I know which streets, and we factor it into both insurance cost and resale value. Flood-zone homes need a specific flood policy that not all insurers offer.
School catchments. Catchment lines move. If schools matter, we verify with Anglophone West School District directly, not from a listing description. I have seen the listing-description trap close on people more than once.
Putting it all together, here is the order I walk first-time buyers through.
Open the FHSA today. Get fully pre-approved before looking at homes. Budget closing-day cash beyond the down payment. Always ask about the oil tank, the heat type, the well, the septic, and the catchment. Do not chase the perfect home; act on the right one.
I do this every week with first-time buyers across greater Fredericton. If you want a discovery call, no commitment, no pressure, just twenty minutes to figure out where you stand, that is what the booking page is for.