First Time Home Buyer

How much you can afford depends on your income, expenses and ability to repay the loan. When calculating monthly payments, it's easy to use just the asking price; however, this is not a realistic cost estimate. Homeowners insurance and property taxes will need to be included in your monthly budget as well as any closing and inspection costs for your short-term budget. With a multitude of loan programs available, the Royal Bank lending team can help determine an amount that is right for you.

Access our mortgage calculators for more information.

A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. While the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is typically lower and you'll pay less than half of the total interest of a traditional 30-year mortgage.

Although a 15-year mortgage is attractive, many borrowers find the lower monthly payment of a 30-year mortgage more feasible.

The 15-year fixed rate mortgage is most popular among individuals who are established in their careers, have higher incomes and aim to own their homes before they retire.

None of the loan programs we offer have penalties for prepayment. You can pay off your mortgage any time with no additional charges.

The term of your loan will impact your interest rate. To view up-to-date rate information, visit our Rate Center to get a customized rate quote. Here, you can apply for a loan entirely online, view current rate information and sign up to receive email alerts on current rate information.

At Royal Bank, we take quotes very seriously. Your Royal Bank lender will provide a Good Faith Estimate (GFE) that breaks down best-estimate costs you should expect to see at closing. The items listed on a GFE include third party fees that Royal Bank collects and passes on to the person who performed the service; taxes and recording fees; lender fees that are established for items such as document preparation; and prepaid fees such as homeowners insurance.

The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and especially your mortgage lender, want to make sure the property is indeed yours and that no individual or government entity has any right, lien, claim, or encumbrance on your property.

The function of a title insurance company is to make sure your rights and interests to the property are clear, that transfer of the title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected. Title companies typically issue two types of title policies; an owner's policy that covers you, the homebuyer, and a lender's policy that covers the lending institution over the life of the loan. If the loan is a purchase, both types of policies are issued at the time of closing for a one-time premium.

Prior to issuing a policy, the title company performs an in-depth search to determine if anyone other than you has interest in the property. This allows any title problem to be identified and corrected prior to your purchase of the property. Once a policy is issued, any future claim covered by your policy and any legal fees involved in the defense of your rights is absorbed by the title company. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property.

Mortgage insurance should not be confused with mortgage life insurance, which is designed to pay off a mortgage in the event of a borrower's death. Mortgage insurance makes it possible for you to buy a home with less than a 20 percent down payment. It protects the lender against the additional risk associated with low down payment lending.

Low down payment mortgages are becoming more and more popular, and by purchasing mortgage insurance, lenders are comfortable with down payments as low as 3 – 5 percent of the home's value. It also provides you with the ability to buy a more expensive home than might be possible if a 20 percent down payment were required.

It may be possible to cancel private mortgage insurance when your loan balance is reduced to a certain amount, typically below 78 - 80 percent of the property value. If you have any questions about when your mortgage insurance could be cancelled, please contact your mortgage consultant.