First-time home buyer guide in Canada

Buying your first home in Canada is a significant financial decision. Understanding the process from start to finish helps you move through it with confidence and avoid costly mistakes.

Step One: Assess Your Finances

Before you look at a single listing, get a clear picture of your finances. Review your credit score, calculate your debt ratios, and determine how much you have available for a down payment and closing costs. This tells you what price range is realistic.

Step Two: Get Mortgage Pre-Approval

A mortgage pre-approval confirms how much a lender is willing to lend you and locks in a rate for 90 to 120 days. It gives you a firm budget to work with and signals to sellers that you're a serious buyer.

Step Three: Find a Real Estate Agent

A real estate agent who works with buyers represents your interests in the transaction, helps you identify suitable properties, and guides you through the offer and negotiation process. Their commission is typically paid by the seller.

Step Four: Start Your Search

With your budget confirmed and an agent in place, begin searching for properties that meet your criteria. Attend viewings, ask questions, and take notes. Don't rush. Most buyers view multiple properties before making an offer.

Step Five: Make an Offer

When you find the right property, your agent will help you prepare an offer. The offer includes the purchase price, any conditions (such as financing approval or a satisfactory home inspection), and the proposed closing date. The seller can accept, reject, or counter your offer.

Step Six: Complete Due Diligence

If your offer is accepted, complete your due diligence before the conditions expire. This typically includes a home inspection, finalizing your mortgage approval, and reviewing any strata or condo documents if applicable.

Step Seven: Close the Transaction

Closing involves signing the legal documents, paying closing costs, and transferring funds. A real estate lawyer or notary handles the legal side of the transaction. On closing day, you receive your keys.

First-Time Buyer Programmes in Canada

Several programmes exist to help first-time buyers:

• First Home Savings Account (FHSA): A registered account that allows first-time buyers to save up to $40,000 tax-free toward a home purchase
• Home Buyers' Plan (HBP): Allows first-time buyers to withdraw up to $35,000 from their RRSP tax-free for a home purchase, to be repaid over 15 years
• First-Time Home Buyer's Tax Credit: A non-refundable tax credit of up to $1,500 for eligible first-time buyers