Purchasing your first home is a milestone achievement—and a major financial decision. In thriving markets like Abbotsford and Surrey, first-time buyers are stepping into a competitive but opportunity-rich landscape. Whether you’re buying a cozy townhome, a single-family property, or investing in a new construction project, understanding how mortgages work is the foundation of a successful purchase.
This guide will walk you through the essential steps, requirements, and expert tips you need to confidently secure your first mortgage and achieve homeownership in 2025.
Why First-Time Homebuyers Face Unique Challenges in 2025
The Canadian housing landscape is evolving. Even with recent Bank of Canada rate adjustments and government incentives, many first-time homebuyers face:
- Tighter mortgage stress tests
- Higher down payment requirements
- Intense competition for affordable inventory
Especially in growing regions like Surrey, demand for entry-level homes remains strong, pushing prices upward. In Abbotsford, buyers often find better affordability, but still need to navigate multiple lending options carefully.
Preparation is everything. Knowing your mortgage eligibility, the documents you need, and potential pitfalls to avoid can make the difference between winning your dream home or missing out.
Step 1: Understanding Mortgage Pre-Approval
Before you start house-hunting, getting pre-approved is critical. Pre-approval:
- Tells you exactly how much you can afford
- Locks in an interest rate for up to 120 days
- Strengthens your offer when negotiating with sellers
According to our blog Tips for Buying Your First Home in 2025, early pre-approval gives you an edge in competitive markets like Surrey.
Key Pre-Approval Requirements:
- Proof of income (pay stubs, T4s, Notices of Assessment)
- Employment verification
- Credit history and score
- List of debts and obligations
- Savings or proof of down payment
Step 2: Documents You’ll Need for Mortgage Application
As outlined in our guide Essential Documents You Need to Apply for a Mortgage in Canada, first-time buyers must prepare a detailed financial profile.
Essential documents include:
- Government-issued ID
- Recent pay statements and employment letter
- Last two years of tax returns (if self-employed)
- Recent bank account statements showing down payment funds
- A summary of all debts (car loans, student loans, credit cards)
Lenders are meticulous in 2025. Missing even one document can delay approval or cost you the property you want.
Step 3: Choosing the Right Mortgage Product
In your first home purchase, the right mortgage structure matters more than ever. Understanding the difference between fixed-rate and variable-rate mortgages is crucial.
Our recent blog, Fixed vs. Variable Rate Mortgages: Making the Right Choice During Economic Uncertainty, explains how to weigh stability versus flexibility.
Common First-Time Buyer Options:
- 5-year fixed rate (budget certainty)
- 3-year fixed rate (shorter commitment, lower rates)
- Variable rate mortgages (riskier but could cost less if rates fall)
A mortgage professional can help compare options, factoring in your financial goals, risk tolerance, and expected length of ownership.
Step 4: First-Time Buyer Incentives and Grants
Both the Government of Canada and British Columbia offer support programs to help first-time buyers:
- First-Time Home Buyer Incentive (FTHBI): A shared equity program to reduce your monthly payments
- Home Buyers’ Plan (HBP): Withdraw up to $35,000 tax-free from your RRSP for a down payment
- BC First-Time Home Buyers’ Program: Reduces or eliminates property transfer tax on qualifying homes under a certain value
Understanding these programs is key. As we detailed in Government Grants and Incentives for First-Time Home Buyers in BC, they can save you thousands.
Step 5: Avoiding Common Mistakes
As a first-time homebuyer, small mistakes can lead to big financial consequences. Key pitfalls to avoid include:
- Making major purchases before closing (like a car or furniture)
- Changing jobs before mortgage approval
- Underestimating closing costs (legal fees, inspections, insurance)
- Forgetting to get mortgage pre-approval before house hunting
For more insights, check out 4 Secret Mortgage Tips for First-Time Homebuyers, which covers insider tips to smooth your journey.
Local Focus: Abbotsford and Surrey Market Snapshot (2025)
Abbotsford:
- Average home price for townhomes and condos: ~$550,000
- Slower price growth compared to Greater Vancouver
- Attractive to first-time buyers seeking value
Surrey:
- Detached home prices remain higher (~$1M), but condo/townhome options around $650,000 make ownership accessible
- Rapid infrastructure growth (SkyTrain expansion) enhances long-term investment potential
Both cities offer unique advantages to first-time buyers—but require different strategies in mortgage planning.
FAQs for First-Time Homebuyers in 2025
Q1: How much down payment do I need as a first-time homebuyer in Abbotsford or Surrey?
In most cases, you’ll need a minimum of 5% down payment for homes under $500,000. For homes between $500,000 and $999,999, you’ll need 5% on the first $500,000 and 10% on the remainder. Homes above $1 million typically require a 20% down payment.
Q2: Can I use gifted funds for my down payment?
Yes. Many first-time buyers use gifted money from parents or relatives. Lenders typically require a signed gift letter confirming that the funds are a true gift and not a loan.
Q3: How important is my credit score to get approved?
Your credit score plays a significant role. A score above 680 is ideal for access to the best rates, but you may still qualify with a lower score through alternative lenders.
Q4: What other costs should I plan for besides the down payment?
Prepare for closing costs totaling roughly 1.5% to 4% of your home’s purchase price, including legal fees, title insurance, property transfer tax (unless exempt), and home inspections.
Q5: Should I get mortgage insurance as a first-time buyer?
If your down payment is less than 20%, you’ll need mortgage default insurance through CMHC, Sagen, or Canada Guaranty. The premium is usually added to your mortgage amount.
Q6: How soon should I start the pre-approval process?
Ideally, at least 4 to 6 months before you plan to buy. This gives you enough time to correct credit issues, save for closing costs, and shop confidently within your budget.
Q7: Can I buy a fixer-upper with my first mortgage?
Yes, using purchase-plus-improvements mortgages. These allow you to borrow additional funds for planned renovations based on lender-approved quotes.
Borrower Personas: Realistic First-Time Buyer Scenarios
- Young Couple in Abbotsford
- Combined income: $120,000
- Goal: Buy a $600,000 townhome
- Strategy: 5% down payment ($30,000), pre-approval for fixed 5-year rate at 3.99%, qualifying under new mortgage stress test rules.
- Single Professional in Surrey
- Income: $95,000
- Goal: Buy a $450,000 condo
- Strategy: Using $25,000 from RRSP under Home Buyers’ Plan for down payment, leveraging BC’s First-Time Home Buyers’ Program for property transfer tax exemption.
- Newcomer Family in Fraser Valley
- Combined income: $150,000
- Goal: New build property at $800,000
- Strategy: 10% down payment, exploring construction mortgage options as covered in Step Towards Homeownership with Construction Mortgages in Abbotsford.
Next Steps for First-Time Homebuyers
- Consult a Mortgage Broker Early
Working with an independent professional helps you access multiple lenders, better rates, and more flexible products than going directly to one bank. - Stay Within Budget
Buy a home you can afford today, not based on what you hope to earn in the future. Unexpected expenses like repairs, childcare, or job changes can happen. - Understand Prepayment Options
Ask about your lender’s prepayment privileges—these allow you to pay extra toward your mortgage each year without penalties, helping you build equity faster. - Protect Your Pre-Approval
Avoid large purchases or new credit applications before closing. They can derail your approval even after you’ve secured a mortgage offer. - Think Long-Term
Consider whether your home will meet your needs for at least the next 5–7 years to avoid costly moves or early mortgage break penalties.
Why Work with Local Experts?
Navigating the first-time homebuyer journey in Abbotsford and Surrey is easier when you have access to local insights. Housing demand, neighborhood values, lender policies, and closing timelines vary greatly across regions.
Mortgage specialists familiar with Fraser Valley markets can:
- Recommend specific lenders and products that fit your goals
- Help you maximize available first-time buyer incentives
- Identify potential risks before they become issues
- Guide you through closing with fewer surprises
Choosing the right mortgage professional is just as important as choosing the right home.
Final Thoughts
Becoming a first-time homeowner is an exciting step—but it requires careful planning, sound advice, and financial discipline. With a strong mortgage foundation, you can enjoy homeownership confidently, knowing that you made decisions that support your long-term financial goals.
If you are looking to buy your first home in Abbotsford, Surrey, or the Fraser Valley, start by building a smart mortgage strategy—and make your dream of homeownership a sustainable reality.