How much do I need to buy my first home in Canada?

You need a minimum 5% down payment on homes under $500,000 (10% on the $500K-$1.5M portion, 20% above $1.5M). Plus 1.5-4% for closing costs. For a $500,000 home, budget at least $35,000-$45,000 total. Government accounts like the FHSA ($40,000) and RRSP HBP ($60,000) help you save tax-efficiently.

What is the step-by-step process to buy a home in Canada?

Step 1: Check finances and credit score. Step 2: Get mortgage pre-approval. Step 3: Find a real estate agent. Step 4: Search and view homes. Step 5: Make an offer. Step 6: Negotiate and accept. Step 7: Fulfill conditions (inspection, financing). Step 8: Hire a lawyer. Step 9: Close and get keys.

What first-time home buyer programs are available in Canada?

FHSA (tax-deductible $40,000 savings), RRSP Home Buyers' Plan ($60,000 withdrawal), First-Time Home Buyers' Tax Credit ($1,500), GST/HST New Housing Rebate (up to $6,300), provincial land transfer tax rebates, and the First-Time Home Buyer Incentive (shared equity with CMHC).

Should I buy a condo or a house as a first-time buyer?

Condos cost less upfront and require less maintenance, but have monthly condo fees ($300-$800+) and special assessments. Houses offer more space and appreciation potential but cost more upfront and require maintenance budgeting. Your choice depends on budget, lifestyle, and the market in your city.

Complete Guide to Buying Your First Home in Canada 2026

Step-by-Step Home Buying Process

Step	Action	Timeline
1	Assess your finances and goals	12-6 months before
2	Build/check credit score (680+ ideal)	6+ months before
3	Save for down payment (FHSA, RRSP, TFSA)	Ongoing
4	Get mortgage pre-approval	2-3 months before
5	Hire a real estate agent (buyer’s agent)	2-3 months before
6	Search for properties	Active searching
7	View homes and attend open houses	Active searching
8	Make an offer	When you find the right home
9	Negotiate price and terms	1-7 days
10	Fulfill conditions (inspection, financing)	5-10 days
11	Hire a real estate lawyer/notary	After accepted offer
12	Final mortgage approval	1-2 weeks
13	Closing day — sign papers, get keys	30-90 days after offer

How Much Home Can You Afford?

Household Income	Approximate Mortgage (at 5%)	Plus 5% Down Payment	Home Price
$60,000	~$250,000	$13,000	~$263,000
$80,000	~$340,000	$17,000	~$357,000
$100,000	~$430,000	$22,000	~$452,000
$120,000	~$520,000	$27,000	~$547,000
$150,000	~$660,000	$41,000	~$701,000

Based on 25-year amortization, 5% rate, stress test at 7%, and GDS ratio under 39%.

Affordability Rules

Rule	Details
GDS (Gross Debt Service)	Housing costs under 39% of gross income
TDS (Total Debt Service)	All debt payments under 44% of gross income
Housing costs include	Mortgage, property tax, heating, 50% of condo fees
Stress test	Must qualify at higher of 5.25% or your rate + 2%

Down Payment Requirements

Home Price	Minimum Down	Down Payment Amount	CMHC Insurance
$300,000	5%	$15,000	$12,000 (4.00%)
$400,000	5%	$20,000	$16,000 (4.00%)
$500,000	5%	$25,000	$20,000 (4.00%)
$600,000	5%/$500K + 10%/$100K	$35,000	~$19,775 (3.50%)
$800,000	5%/$500K + 10%/$300K	$55,000	~$26,075 (3.50%)
$1,000,000	5%/$500K + 10%/$500K	$75,000	~$32,375 (3.50%)
$1,500,000+	20% (mandatory)	$300,000+	Not required

First-Time Buyer Programs

Program	Benefit	How to Access
FHSA	$8,000/year ($40,000 lifetime) tax-deductible; tax-free withdrawal for home	Open at any bank/brokerage
RRSP Home Buyers’ Plan (HBP)	Withdraw up to $60,000 from RRSP; repay over 15 years	Through CRA at withdrawal time
First-Time Home Buyers’ Tax Credit	$10,000 credit = $1,500 tax savings	Claim on tax return (line 31270)
GST/HST New Housing Rebate	Up to $6,300 on new construction	Apply through builder or CRA
Land Transfer Tax Rebate (ON)	Up to $4,000	Applied at closing
Land Transfer Tax Rebate (BC)	Up to $8,000 on homes under $500,000	Applied at closing
Alberta — No land transfer tax	Saves $5,000-$20,000+	Automatic

FHSA + HBP Combined Strategy

Source	Per Person	Per Couple
FHSA	$40,000 (tax-free)	$80,000
RRSP HBP	$60,000 (repayable)	$120,000
Total	$100,000	$200,000

Mortgage Types

Type	Fixed Rate	Variable Rate
Rate	Locked for term (1-5 years)	Fluctuates with prime rate
Payment	Same every month	May change when prime changes
Best when	Rates are low and expected to rise	Rates are high and expected to drop
Penalty (break early)	Interest rate differential (IRD) — can be expensive	Usually 3 months’ interest
Historical advantage	Variable has been cheaper ~80% of the time	—

Common Mortgage Terms

Term	Details
Amortization	25 years (standard), up to 30 years for first-time buyers
Term	1-5 years (then renew)
Open vs closed	Open: can repay anytime. Closed: prepayment limits
Prepayment privileges	Typically 10-20% lump sum + 10-20% payment increase per year
Portable	Transfer mortgage to new home without penalty

Closing Costs Breakdown

Cost	Amount	Notes
Land transfer tax	0.5-2.5%	Varies by province
Legal fees	$1,000-$2,500	Lawyer/notary
Home inspection	$400-$600	Strongly recommended
Appraisal	$300-$500	Lender may cover
Title insurance	$200-$500	Required by most lenders
CMHC insurance (if < 20% down)	2.8-4% of mortgage	Added to mortgage or paid upfront
Home insurance	$100-$300/month	Required before closing
Moving costs	$500-$3,000	DIY to full service
Property tax adjustment	Varies	Pro-rated from seller
Utility deposits	$100-$300	New accounts
Total	$10,000-$30,000	Budget 1.5-4% of price

Condo vs House vs Townhouse

Factor	Condo	Townhouse	Detached House
Typical price (major city)	$350,000-$700,000	$500,000-$900,000	$700,000-$1,500,000+
Monthly condo fees	$300-$800+	$200-$500	$0
Maintenance responsibility	Building handles exterior	Shared	All yours
Space	500-1,000 sq ft	1,000-1,800 sq ft	1,200-3,000+ sq ft
Yard	No (maybe balcony)	Small	Yes
Appreciation potential	Moderate	Good	Highest
Insurance cost	Lower (content only)	Moderate	Higher
Parking	May cost extra ($50-$200/month)	Usually included	Included

Home Inspection

What Inspector Checks	Why It Matters
Foundation	Cracks can cost $5,000-$20,000+ to repair
Roof	Replacement costs $5,000-$15,000
Plumbing	Old pipes (galvanized/lead) need replacement
Electrical	Knob-and-tube or aluminum wiring = safety/insurance issue
HVAC	Furnace/AC replacement $3,000-$8,000
Water damage/mould	Hidden damage can be very expensive
Pests	Termites, carpenter ants
Asbestos	Common in pre-1990 homes

Monthly Homeownership Costs

Expense	Condo	House
Mortgage ($500K, 5%, 25-year)	$2,908	$2,908
Property tax	$200-$400	$300-$600
Condo fees	$400-$700	$0
Home insurance	$30-$60	$100-$200
Utilities	$50-$100 (some in condo fee)	$200-$400
Maintenance reserve	$0 (in condo fee)	$200-$500
Total monthly	$3,588-$4,168	$3,708-$4,608

Credit Score Requirements

Credit Score	Qualification
760+	Best mortgage rates
720-759	Excellent rates
680-719	Good rates; most lenders approve
650-679	Some lenders; slightly higher rates
600-649	B-lenders; higher rates (1-2% more)
Below 600	Private lenders; much higher rates

How to Improve Credit Score Fast

Action	Impact	Timeline
Pay all bills on time	High	Immediate (1-2 months)
Reduce credit utilization (under 30%)	High	1-2 months
Don’t apply for new credit	Moderate	3-6 months
Keep old accounts open	Moderate	Ongoing
Fix errors on credit report	High	1-3 months

Buying Timeline Checklist

☐	Step	When
☐	Open FHSA and start contributing	1-5 years before
☐	Check and improve credit score	6+ months before
☐	Determine budget	3-6 months before
☐	Get mortgage pre-approval	2-3 months before
☐	Find a real estate agent	2-3 months before
☐	Search for homes	Active phase
☐	Make an offer	When ready
☐	Home inspection	After accepted offer
☐	Final mortgage approval	After conditions met
☐	Hire lawyer/notary	After accepted offer
☐	Set up home insurance	Before closing
☐	Final walkthrough	Day before closing
☐	Closing day — get keys	Scheduled closing date