Buying your first home is a big milestone—especially for newcomers to Canada. It’s not just a financial investment, but also a source of pride, stability, and accomplishment. However, navigating the Canadian housing market can feel overwhelming when it’s different from what you’re used to in your home country. That’s why it’s crucial to understand the basics before taking the leap into home ownership.
This guide outlines essential tips and insights for first-time home buyers in Canada, including how to prepare financially, decide whether to rent or buy, and what to expect during the purchase process
Why Home ownership Matters for Newcomers
According to a 2019 Royal Le Page survey, newcomers make up one in five home buyers in Canada. Most wait about three years before purchasing, often arriving with savings specifically for buying a home. For many, owning a home is a core part of their immigration journey—providing a sense of stability, belonging, and a foundation for building wealth.
Essential Tips for First-Time Home buyers
1. Research the Housing Market
Start by using online tools and real estate websites to understand current trends, home prices, affordability, and mortgage rates in your area. This groundwork will help you make informed decisions.
2. Know What You Can Afford
Use online mortgage calculators to estimate your monthly payments and understand your price range. This will help you avoid overextending your finances. Check out the getting started mortgage calculator.
3. Get Pre-Approved for a Mortgage
A pre-approval shows sellers you’re a serious buyer and helps you set realistic expectations. It includes the interest rate, mortgage amount, and pre-approval term (typically 90–120 days).
4. Work with a Realtor
Realtors are licensed professionals who understand the local market and can help you find a home that fits your needs and budget. Best of all, the seller pays the realtor’s commission—not you.
5. Hire a Real Estate Lawyer
Your lawyer will review the purchase agreement, ensure your rights are protected, and help with the legal documents during closing.
6. Prepare a Budget for Extra Costs
Beyond the down payment, there are closing costs (such as legal fees and taxes), moving expenses, and maintenance costs. Be prepared with a comprehensive budget.
Financial First Steps Before Buying
Buying a home is likely the biggest purchase you’ll ever make. Here’s how to prepare financially:
Build Your Credit History
Lenders need to see a reliable payment record. Open a credit card or take a small loan and pay it off consistently to build your Canadian credit history.
Save for a Down Payment
In Canada, you can buy a home with as little as 5% down (plus mortgage insurance). The minimum down payment depends on the purchase price:
Build an Emergency Fund
Unexpected expenses—like a leaky roof or plumbing issues—can cost thousands. An emergency fund gives you peace of mind and financial security.
Understanding Closing Costs
- Appraisal Fee: Required by lenders to confirm the home’s value
- GST/HST: Applicable on new or substantially renovated homes
- Land Transfer Tax: Varies by province and based on purchase price
- Legal Fees: For title search, registration, and document preparation
- Mortgage Default Insurance: Required for down payments under 20%
- Home Inspection Fee: Highly recommended for resale homes ($400–$600)
- Mortgage Life Insurance: Optional coverage in case of death or disability
Do You Need a Home Inspection?
Yes, especially when buying a resale home. A home inspection can reveal hidden issues with:
- Foundation
- Plumbing
- Windows and Insulation
- Furnace and HVAC
- Mold or structural damage
If problems are found, you can negotiate repairs or a lower price—or walk away.
What Kind of Home is Right for You?
Before shopping, consider:
- Number of bedrooms and bathrooms
- Storage and space needs
- Proximity to schools, work, transit, and shopping
- Type of property (condo, detached, townhouse, etc.)
Be realistic. Many first-time buyers start with a modest “starter home” and move up over time.
Making an Offer and Closing the Deal
When you find the right home, your realtor will help you make an offer. The offer includes:
- Price you’re willing to pay
- Deposit amount
- Closing date
- List of inclusions (e.g., appliances)
- Conditions (financing, home inspection, sale of your current home)
Final Thoughts: Take the First Step with Confidence
Buying your first home in Canada is an exciting and life-changing experience. It’s also a process that involves careful planning, smart budgeting, and ongoing learning.
Whether you’re exploring traditional mortgages, co-ownership, or rent-to-own options, make sure you understand the journey ahead. And remember, knowledge is your greatest asset as a first-time home buyer.