Buying Your First Home

There is no universal break-even period for buying. Compare transaction costs, maintenance, financing, rent, expected time in the home, and the local market before deciding.

The down payment is the cash you pay upfront. The rest becomes your mortgage. In Canada, the minimum down payment depends on the purchase price: 5% on the first $500,000, 10% on the portion between $500,000 and $1,499,999, and 20% for homes priced at $1.5 million or more. (The $1.5M cap took effect December 15, 2024 — previously it was $1 million.)

Mortgage default insurance from CMHC, Sagen, or Canada Guaranty is generally required when the down payment is below 20%, subject to eligibility and price rules. For homes priced at $1.5 million or more, the minimum down payment is 20% and mortgage loan insurance is not available. The premium depends on factors such as loan-to-value ratio and amortization, and may be added to the mortgage. It protects the lender; check the insurer's current premium schedule for an exact quote.

A mortgage is a loan secured by your home. If you stop making payments, the lender may use enforcement remedies allowed by your province or territory, which can include foreclosure or power of sale. Canadian mortgages commonly have a contract term shorter than the full amortization period. When a term ends, you renew or arrange new financing, potentially at a different rate.

Closing costs vary by province, municipality, lender, and property type. Build a local estimate before making an offer; land transfer taxes and taxes on a new build can change the total substantially.

• Land transfer tax (varies by province — Ontario charges 0.5–2.5% on a sliding scale; BC charges property transfer tax of 1–3%)
• Legal fees and disbursements (ask a real estate lawyer for a quote)
• Title insurance, if required or selected
• Home inspection, if arranged
• Appraisal fee, if required by the lender
• Property tax adjustment (reimburse seller for prepaid property taxes)
• GST/HST on new construction homes (resale homes are exempt)
• Municipal and provincial-specific taxes (e.g., Welcome Tax in Quebec, additional property transfer tax in Toronto and Vancouver)

In Canada, property taxes and home insurance are typically paid separately by the homeowner — not bundled into your mortgage payment. Some lenders may require you to set up a property tax account with them, but it's not as standard as in the U.S. Budget for these costs on top of your mortgage payment.

1. 1Check your credit and finances — Review income, debts, housing costs, and any debt-service measures your lender uses; set a budget based on your own expenses.
2. 2Maximize your FHSA and HBP — Start contributing to your First Home Savings Account early. Plan your RRSP withdrawals under the Home Buyers' Plan.
3. 3Save for the down payment, local closing costs, moving costs, and a reserve for immediate repairs or replacements.
4. 4Get pre-approved from 2–3 lenders (banks, credit unions, or a mortgage broker). Compare rates and terms.
5. 5Find a real estate agent — in Canada, the seller typically pays both the listing and buyer's agent commissions, so their service is generally free to you.
6. 6Shop for homes — be realistic about needs vs. wants. Location and commute matter more than finishes.
7. 7Make an offer — your agent will guide you. Include a financing condition and inspection condition.
8. 8Get a home inspection — never waive this. A $500 inspection can reveal $40,000 in problems.
9. 9Finalize your mortgage — remove conditions, lock in your rate, and submit all required documents promptly.
10. 10Arrange home insurance (required before closing) and set up utilities.
11. 11Final walkthrough the day before closing.
12. 12Closing day: your lawyer handles the document signing and fund transfers. You get the keys!

Official Government Resources