Prince Edward Island is one of those places that feels like a genuine secret. Charlottetown and the communities surrounding it offer some of the most affordable home prices in Atlantic Canada, and the province keeps closing costs refreshingly simple — a single flat transfer tax rate with no municipal variation. If you’re crunching numbers for a PEI purchase, you’re in the right place. This calculator works through your full mortgage picture: monthly payment, CMHC insurance, and what to have ready on closing day.
Estimates only. Rates shown are examples as of June 2026. Always confirm the actual numbers with your lender or mortgage broker before you commit.
Quick facts for PEI buyers
- PEI charges a Real Property Transfer Tax (RPTT) of 1% on every purchase — a single flat rate, applied to the greater of the purchase price or the assessed value.
- First-time buyers who meet PEI’s residency rules qualify for a full exemption — zero transfer tax — at any price up to $1,000,000. There is no price cap; the old $200,000 limit was removed in 2016. Above $1,000,000, the 2% portion on the amount over $1M still applies even for first-time buyers.
- PEI does not charge a provincial tax on your CMHC insurance premium — unlike Ontario (8%), Quebec (9%), and Saskatchewan (6%), there’s no extra cash due at closing for this.
- Federal programs — the FHSA, the RRSP Home Buyers’ Plan, and the GST/HST rebate — are fully available here.
Minimum down payment rules in PEI
PEI follows the same federal rules as every province:
- 5% on the first $500,000 of the price
- 10% on the portion between $500,000 and $1,500,000
- 20% if the home costs $1,500,000 or more (these homes cannot be insured)
On a typical PEI purchase in the $250,000–$350,000 range, the minimum is 5% — so on a $280,000 home, the minimum down payment is just $14,000. Putting more down reduces your premium and your monthly payment.
The maximum insured mortgage is $1.5 million, raised from $1 million in December 2024.
How CMHC insurance works in Prince Edward Island
If your down payment — the cash you put toward the home up front — is less than 20% of the price, Canadian law requires you to carry mortgage default insurance. This most often comes from the CMHC (Canada Mortgage and Housing Corporation), the federal agency that backs these loans.
Worth being upfront about: this insurance protects your lender, not you. If you stopped making payments, it reimburses the bank. You pay the cost, but the protection runs the other way. It exists because it lets banks lend to buyers with smaller down payments — without it, you’d need the full 20% saved before you could get a mortgage at all.
The cost is the premium — a percentage of your loan that depends on how much you put down. According to CMHC, the standard rates are:
- 5% down → premium of 4.00% of the loan
- 10% down → premium of 3.10% of the loan
- 15% down → premium of 2.80% of the loan
The premium is financed — added onto your mortgage, not paid in cash. You repay it gradually as part of your monthly payments.
And here’s the good news for PEI buyers: Prince Edward Island does not add a provincial tax on top of the CMHC premium. In Ontario or Quebec, you’d owe that surcharge in cash at closing on top of everything else. In PEI, that line doesn’t exist.
Local regulations and closing costs in PEI
The Real Property Transfer Tax — flat 1%, with one important exception
The Real Property Transfer Tax (RPTT) is PEI’s equivalent of a land transfer tax. According to the Government of Prince Edward Island, the rate is a flat 1% of the greater of the purchase price or the assessed value — meaning if a property’s assessed value happens to be higher than what you paid, you still pay tax on the higher number. Worth asking your lawyer to verify the assessed value before you finalize your budget.
To estimate the RPTT on any PEI purchase — with or without the first-time buyer exemption — use our PEI land transfer tax calculator and tick the first-time buyer box to see your exemption applied instantly.
Homes over $1 million: PEI’s 2025 provincial budget introduced a higher rate of 2% on the portion of the purchase price (or assessed value) that exceeds $1,000,000, effective April 28, 2025. For a typical PEI purchase this won’t apply — homes over $1 million are rare on the Island — but if your purchase is in that range, confirm the current rules at princeedwardisland.ca.
The first-time buyer exemption — full, with no price cap
Here’s the standout feature of PEI’s transfer tax for first-time buyers: if you qualify, you pay zero transfer tax on your purchase — at any price up to $1,000,000. The old $200,000 price cap was removed back in 2016, so a qualifying first-time buyer at $280,000, $450,000, or $800,000 all owe the same amount: $0 on the 1% portion.
The only price-related nuance now is the $1,000,000 threshold. Above that, a qualifying first-time buyer still pays 2% on the amount over $1M (the exemption covers the flat 1% portion only). On a $1,200,000 purchase, for example, that works out to about $4,000 — far less than the roughly $14,000 a repeat buyer would owe on the same property.
To qualify, you generally must be a Canadian citizen or permanent resident, and must either have resided in PEI for at least 183 consecutive days before the purchase or commit to occupying the new home for at least 183 consecutive days. Your lawyer will walk you through the exemption application at closing.
Beyond the transfer tax, your PEI closing budget will typically include:
- Legal fees: roughly $1,000–$1,500 in Prince Edward Island — generally on the lower end compared to larger provinces
- Title insurance: around $250–$350 for a typical residential purchase
- Home inspection: typically $400–$500
These are approximations. Your lawyer will give you a precise closing-cost statement before you sign.
Your options as a PEI buyer
Federal programs are your primary tools here, and the provincial first-time-buyer exemption on the RPTT is PEI’s main purchase incentive. Beyond that, there is no provincial cash grant, forgivable loan, or down payment assistance program in PEI at the time of writing — it’s worth saying that honestly, rather than setting expectations that don’t match reality.
First Home Savings Account (FHSA) The FHSA is a registered account built specifically for first-time buyers. You can contribute up to $8,000 per year and up to $40,000 lifetime. Contributions are tax-deductible like an RRSP, and qualifying withdrawals toward a home purchase are completely tax-free like a TFSA. You can stack the FHSA with the Home Buyers’ Plan below. According to Canada.ca, the FHSA opened for contributions in April 2023.
RRSP Home Buyers’ Plan (HBP) With the HBP, you can withdraw up to $60,000 per person from your RRSP — $120,000 for a couple buying together — tax-free, to put toward a down payment. You repay the amount over 15 years. It’s not free money, but it is an interest-free loan from yourself, which is a genuinely good deal.
First-Time Home Buyers’ GST/HST Rebate (introduced March 2025) For agreements signed on or after March 20, 2025, eligible first-time buyers of a newly built home can recover the GST (or the federal part of the HST) paid to the builder — up to $50,000. The full rebate applies on homes up to $1 million; a partial rebate applies from $1 million to $1.5 million. The “first-time buyer” definition uses a 5-year lookback, not a “never owned” rule. Confirm your eligibility at canada.ca — the program is recent and details may have been updated.
PEI Real Property Transfer Tax — first-time buyer exemption As noted above, PEI’s main provincial purchase incentive is the full RPTT exemption for qualifying first-time buyers — with no price cap. You pay $0 on the 1% transfer tax at any purchase price up to $1,000,000. (Above $1M, the 2% portion on the excess still applies.) Tick the first-time buyer box in our PEI land transfer tax calculator to see the exemption applied.
How to use this calculator
It takes about thirty seconds:
- Enter the home price you’re considering.
- Enter your down payment in dollars. The tool checks it against the federal minimum and flags it if it falls short.
- Enter the interest rate your lender quoted (or a rate you want to test).
- Choose your amortization — the number of years to repay, usually 25.
You’ll see your estimated monthly payment, your CMHC premium, and your total mortgage with the premium included. There is no provincial premium-tax line for Prince Edward Island, because PEI doesn’t charge one.
One detail worth knowing: this calculator uses the correct Canadian method. Canadian fixed-rate mortgages compound semi-annually (twice a year), not monthly as in the United States. Many calculators get this wrong. Ours follows the Canadian convention.
Example — a $280,000 PEI home with 10% down
Let’s walk through a realistic PEI scenario so you can see every number.
You’re buying a $280,000 home and putting 10% down ($28,000) — comfortably above the $14,000 minimum for this price. Rate: 4.79%, amortization: 25 years.
The mortgage side:
- Down payment: $28,000
- Loan before insurance: $280,000 − $28,000 = $252,000
- CMHC premium at 10% down (3.10%): $252,000 × 3.10% = $7,812 (financed into the mortgage)
- No PEI provincial tax on the premium
- Total mortgage: $252,000 + $7,812 = $259,812
- Estimated monthly payment at 4.79% over 25 years: $1,480
The closing-cost side:
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Real Property Transfer Tax on $280,000: $2,800 for a repeat buyer (1% × $280,000). A qualifying first-time buyer owes $0 — the exemption applies at any price up to $1,000,000, with no cap.
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Legal fees: approximately $1,200
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Title insurance: approximately $300
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Approximate total closing costs beyond the down payment: about $4,300
These closing costs are genuinely low by Canadian standards — even before any first-time-buyer exemption applies. In most provinces, the land transfer tax alone on a comparable purchase would run considerably higher.
Frequently asked questions
How much is PEI’s Real Property Transfer Tax?
The RPTT is a flat 1% of the greater of the purchase price or the assessed value. On a $280,000 home, that’s $2,800. In 2025, a 2% rate was introduced for the portion exceeding $1,000,000 — but for most PEI purchases that won’t be a factor. Confirm current rules at princeedwardisland.ca.
Are first-time buyers exempt from PEI’s transfer tax?
Yes — and there is no price cap. Qualifying first-time buyers pay $0 on the 1% transfer tax at any purchase price up to $1,000,000. The old $200,000 limit was removed in 2016. Above $1,000,000, you still pay the 2% on the portion over $1M even as a first-time buyer. Eligibility is residency-based: you must generally have resided in PEI for at least 183 consecutive days before the purchase, or occupy the home for at least 183 days after; Canadian citizen or permanent resident required. Tick the first-time buyer box in our PEI land transfer tax calculator to see your exemption applied, and confirm your eligibility with your lawyer at closing.
Does PEI charge a tax on CMHC insurance?
No. Prince Edward Island does not apply a provincial surcharge to the CMHC insurance premium. Ontario, Quebec, and Saskatchewan do — PEI buyers pay only the premium itself, which is financed into the mortgage.
Can I use my RRSP or FHSA for a down payment in PEI?
Yes to both. The Home Buyers’ Plan lets you withdraw up to $60,000 from your RRSP tax-free ($120,000 for a couple). The FHSA lets you build up to $40,000 lifetime in tax-free, tax-deductible savings for a home purchase. You can use both programs together to maximize your down payment.
Can I avoid CMHC insurance in PEI?
Yes — put down 20% or more of the purchase price. At 20% down, mortgage default insurance isn’t required and there’s no premium to pay. In a market like PEI, where prices are among the most accessible in Atlantic Canada, saving to 20% may be more realistic than in larger Canadian cities.
Sources
- Canada Mortgage and Housing Corporation (CMHC) — mortgage loan insurance, premium rates, and minimum down payment rules.
- Government of Prince Edward Island — Real Property Transfer Tax — the 1% rate, the “greater of” assessed-value rule, and the first-time buyer exemption.
- Government of Prince Edward Island — 2025 Budget — the 2% rate on the portion above $1,000,000, effective April 28, 2025.
- Canada.ca — First Home Savings Account (FHSA) — contribution limits, tax treatment, and withdrawal rules.
- Canada.ca — Home Buyers’ Plan (HBP) — withdrawal limits, eligibility, and repayment rules.
- Canada.ca — First-Time Home Buyers’ GST/HST Rebate — eligibility criteria, home value thresholds, and how to apply.
This page is for general information, not financial advice. Figures are estimates as of June 2026 and change over time — confirm the current numbers with your lender, mortgage broker, or lawyer before you commit.