Canadian First-Time Homebuyer Guide
A complete step-by-step guide to buying your first home in Canada — from financial preparation to closing day.
Assess Your Financial Readiness
Before house hunting, review your credit score (aim for 680+), calculate your GDS/TDS ratios, and determine how much you can afford. Get a free credit report from Equifax or TransUnion. Pay down high-interest debts and avoid major purchases that could affect your credit.
Save for Your Down Payment
The minimum down payment in Canada is 5% for homes under $500,000. However, putting down 20% or more eliminates the need for CMHC mortgage insurance, saving you thousands. Use the First Home Savings Account (FHSA) and RRSP Home Buyers' Plan to maximize your savings.
Get Pre-Approved for a Mortgage
A mortgage pre-approval gives you a firm idea of how much you can borrow and locks in an interest rate for 90–120 days. Shop around — compare rates from at least 3 lenders including banks, credit unions, and mortgage brokers. The stress test applies to all federally regulated lenders.
Find a Real Estate Agent
A buyer's agent represents your interests and is typically paid by the seller's commission. Since 2024, you must sign a buyer representation agreement before an agent can show you homes. Choose an agent with local market expertise and strong negotiation skills.
Search for Your Home
Use REALTOR.ca (the official MLS listing site) to search for properties. Define your must-haves vs. nice-to-haves. Consider location, commute, school districts, and future resale value. Attend open houses and schedule private showings for serious contenders.
Make an Offer
When you find the right home, your agent will prepare an offer with conditions (home inspection, financing, etc.). In competitive markets, you may need to act quickly. Include a home inspection condition whenever possible — waiving it carries significant risk.
Home Inspection & Due Diligence
A professional home inspection ($400–$600) can reveal major issues before you're committed. Review the inspection report carefully and negotiate repairs or price reductions if significant defects are found. Also review the property disclosure statement and title search.
Finalize Your Mortgage
Once your offer is accepted, formally apply for your mortgage with your chosen lender. Provide all required documents (T4s, NOAs, pay stubs, bank statements). The lender will order an appraisal. Avoid any major financial changes (new credit, job change) until after closing.
Closing Day
Your real estate lawyer handles the closing process, including reviewing the purchase agreement, conducting a title search, registering the transfer, and distributing funds. You'll need to provide your down payment and closing costs to your lawyer before closing day.