Have a quick look at the most powerful guide on steps to buying a house for the first time Canada. Easy steps, quick approval.
Buying your first home in Canada can feel pretty overwhelming. After saving up for years, you’re ready to start looking, but suddenly there are so many homes to choose from, piles of paperwork, and costs that seem way higher than you expected. It’s easy to get stuck and feel unsure of where to even begin.
But here’s the good news: you don’t have to figure it all out on your own. With the right steps, the process can be a lot smoother and less stressful. From understanding how mortgages work to figuring out what you can afford, and even managing those hidden costs that pop up along the way—this guide will walk you through it all.
We’ll keep it simple and break it down step by step, so you always know what’s coming next. With a little guidance, you’ll feel more confident in your decisions and be one step closer to finding your dream home. Ready to dive in? Let’s go!
Steps to Buying A House For The First Time Canada
Here are the major steps to buying a house for the first time in Canada, including exploring options like a multi-unit residential mortgage in Canada
Get Pre-Approved for a Mortgage
Get pre-approved for a mortgage with the help of a trusted house mortgage broker near you. Start your journey to homeownership with confidence!
Why It’s Important
Getting pre-approved helps you know how much you can afford and shows sellers you’re serious. It’s important, especially in fast-moving markets where homes sell quickly.
How to Get Pre-Approved
You’ll need these documents:
Proof of Income: Pay stubs, tax returns, or a letter from your employer.
Credit Report: Lenders check your credit score, which affects the interest rate you get.
List of Debts: Include credit cards, loans, or any other debt.
Down Payment: Be ready with the amount you can put down.
A mortgage broker can help you compare lenders and find the best rate.
Pro Tip: Don’t make big financial changes, like buying a car, while getting pre-approved.
Find a Real Estate Agent
Partner with a local expert who knows the market and can guide you every step of the way.
Why You Need One
A real estate agent makes the process easier. They know the local market, handle negotiations, and help with paperwork.
How to Find a Good Agent
Research: Look at reviews, websites, and their experience.
Interview: Meet a few agents to see who understands your needs best.
Experience: Choose an agent who knows the area well and specializes in the type of home you want.
Pro Tip: Pick an agent who is patient and willing to explain everything to you.
Start House Hunting
Discover homes that fit your budget and style. With the right tools and a great agent, your dream home is closer than you think!
Tips for Success
Explore Listings: Use websites like Realtor.ca or Zillow to see homes for sale.
Visit Open Houses: It helps you understand the neighborhood and home style.
Make a List of Priorities: Think about the number of bedrooms, yard size, or proximity to work or schools.
Consider the Neighborhood: Look for things like safety, stores, and transport options.
Pro Tip: Visit the neighborhood at different times of day to get a feel for it.
Making an Offer
Seal the deal on your dream home with confidence! Get expert guidance to negotiate the best terms and make your offer stand out.
How It Works
When you find a home, your agent will help you make an offer, which includes:
Price: How much you are willing to pay.
Conditions: These could be a home inspection or financing approval.
Deposit: You need to show you’re serious by offering a small deposit.
Pro Tip: If the market is competitive, you may need to offer more than the asking price to win the bid.
Home Inspection
Protect your investment by uncovering hidden issues before you buy. A thorough inspection ensures peace of mind for your new home
Why It Matters
A home inspection is important because it helps you find any hidden issues, like leaks, faulty wiring, or mold.
What to Expect
Structural Problems: Look for cracks in walls or foundation.
Plumbing and Electrical: Check for problems with pipes and wiring.
Pests: Inspect for signs of termites or other pests.
Pro Tip: Never skip the inspection, even if the house seems perfect. It’s worth the cost to avoid surprises.
Financing the Purchase
Explore your mortgage options and find the best fit for your budget. With the right financing, you can make homeownership a reality with ease!
Options to Explore
Fixed-Rate Mortgage: Your payments stay the same throughout the loan.
Variable-Rate Mortgage: Your payments start lower but may change over time.
Government Programs
First-Time Home Buyer Incentive (FTHBI): Helps lower your monthly payments.
Home Buyers’ Plan (HBP): Lets you use money from your RRSP for your down payment without paying taxes.
Pro Tip: Ask a mortgage broker which programs will help you the most.
Closing the Deal
You’re almost there! Finalize the paperwork, settle any last details, and get ready to take ownership of your new space. Congratulations on this big step!
The Final Steps
Title Search: A lawyer checks for legal problems with the property.
Final Walkthrough: Make sure everything is in good condition before you buy.
Closing Costs: Expect to pay 1.5%-4% of the home’s price for things like lawyer fees, taxes, and insurance.
Pro Tip: Set aside money for closing costs so you’re not surprised.
Moving In
The keys are yours—now it’s time to turn your new house into a home. Start fresh, stay organized, and enjoy your next chapter!
Making It Smooth
Hire Movers: Movers can help take the stress out of moving. Get quotes from different companies to find the best deal.
Update Your Address: Let your bank, utility companies, and Canada Post know your new address.
Unpack in Stages: Start with essential items, then move on to the rest.
Stay Organized: Label your boxes and try to unpack one room at a time.
Pro Tip: Arrange for utilities to be active on your moving day so everything is ready.
Real-World Statistics on the Housing and Mortgage Market in Canada (2024)
The Canadian housing and mortgage market in 2024 presents a dynamic landscape shaped by interest rates, inventory changes, and regional variations. Here are the key trends:
Home Prices and Market Balance
The national average home price stood at approximately $669,630 in September 2024, a 2.1% increase from the previous year. However, prices in cities like Vancouver and Toronto have seen slight declines due to higher inventory levels and moderated demand
The market is relatively balanced, with a Sales-to-New-Listings Ratio (SNLR) of 54%, indicating equal opportunities for buyers and sellers
Housing Supply and Inventory
New listings surged by nearly 5% month-over-month, contributing to a total inventory of 4.1 months of housing supply. Despite this, supply remains below the long-term average, keeping the market competitive.
To keep pace with Canada’s population growth, housing stock must increase by 315,000 units annually until 2030, significantly above the current completion rates of 220,000–240,000 units per year.
Impact of Interest Rates
High mortgage rates continue to challenge affordability. Fixed-rate mortgage renewals in 2024 are seeing significant payment increases, but Canada’s stringent stress testing has helped keep mortgage delinquencies low
Recent interest rate cuts of 75 basis points by the Bank of Canada have not yet led to substantial increases in buyer activity. However, additional rate reductions and the introduction of a 30-year amortization option are expected to improve affordability by 2025
Regional Insights
Toronto and Vancouver: Both cities experience softened demand, with slight price declines due to increased inventories.
Calgary and Edmonton: These markets remain strong, with robust price growth and high buyer activity despite broader market moderation.
Montreal: Early signs of market rebound are emerging, unlike the trend in other major cities
Future Projections
The housing market is expected to gain momentum in 2025 with further interest rate cuts. However, affordability issues will persist, especially in high-demand urban areas. Spring 2025 is anticipated to bring renewed activity and possible price increases
How AJP Mortgage Can Help?
AJP Mortgage specializes in making homeownership accessible for various needs, whether you’re a first-time buyer, managing a tight budget, or navigating complex financial situations. Here’s how they assist, complemented by real-life case studies:
Financial Assessment and Budgeting Support
AJP works with clients to evaluate income, debts, and savings, creating a realistic budget for home purchases.
Case Study: Mark and Lisa
A young couple, Mark and Lisa, struggled to save for a down payment. AJP helped them establish a budget and access a first-time homebuyer program. They successfully purchased their first home while managing daily expenses.
Access to Government Programs
AJP connects clients to programs like the First-Time Home Buyer Incentive, reducing upfront costs.
Case Study: Sarah
A teacher named Sarah faced affordability challenges. AJP guided her in applying for government incentives, reducing her monthly mortgage payments, and enabling her to buy a condo in Ottawa.
Low Down Payment Options
AJP partners with lenders offering flexible terms, such as mortgages requiring only 5% down.
Case Study: Jamal
Jamal had limited savings but wanted to own a home. AJP helped him secure a 5% down mortgage, allowing him to purchase a townhouse within his budget.
Finding Affordable Homes
AJP helps buyers explore less expensive markets, including smaller towns or condos, to fit their financial capabilities.
Case Study: Jenna and Tyler
Toronto-based buyers Jenna and Tyler found the city’s housing market overwhelming. With AJP’s help, they purchased a more affordable condo in Windsor, fast-tracking their journey to homeownership.
Negotiating Better Deals
AJP supports clients in negotiating purchase prices and terms, such as closing cost reductions.
Case Study: Nadia
Nadia was concerned about high closing costs. With AJP’s negotiation skills, she secured a deal where the seller covered part of the expenses, saving her thousands.
AJP Mortgage not only provides financial expertise but also guides clients through complex processes, making homeownership a reality for many.
Tax Considerations
Buying a home in Canada means dealing with a few important taxes and knowing about some helpful tax benefits. Here’s a simple guide to help you understand:
Land Transfer Tax (LTT)
What It Is: You pay this tax when buying a home. The amount depends on your province or city.
First-Time Buyer Tip: Many provinces, like Ontario, offer rebates for first-time buyers. In Toronto, you can get extra rebates for municipal taxes too.
GST/HST on New Homes
What It Is: If you buy a brand-new home, you might have to pay GST or HST (5% to 15%, depending on the province).
Rebate Tip: Some buyers qualify for rebates that lower the total cost.
Home Buyers’ Plan (HBP)
What It Is: First-time buyers can withdraw up to $35,000 from their RRSPs tax-free to use as a down payment. Couples can withdraw up to $70,000.
Payback Reminder: You must repay this amount within 15 years.
Principal Residence Exemption
What It Is: When you sell your home, you don’t pay tax on the profit if it was your main residence.
Keep Records: Keep track of improvements to the property, as they might save you money later.
Moving Expenses
What It Is: If you move 40 km closer to a new job or school, you can claim moving expenses like transportation or storage.
Save Receipts: Keep proof of your expenses to claim this deduction.
First-Time Home Buyers’ Tax Credit
What It Is: A $1,500 federal tax credit for first-time buyers to help with closing costs.
Don’t Forget: Claim it on your tax return in the year you buy your home.
Property Tax
What It Is: Annual taxes paid to your local government. They depend on your home’s value and location.
Deferral Options: Some provinces let seniors or low-income homeowners defer these payments.
Energy Efficiency Rebates
What It Is: Rebates or grants for upgrading your home with energy-saving features like better insulation or windows.
Check Programs: Look into the Canada Greener Homes Grant for potential savings.
Taxes can seem complicated, but these tips make them easier to manage. A tax expert or mortgage advisor can guide you further!
Government Programs for First-Time Home Buyers
Here’s a simple breakdown of government programs to help first-time homebuyers in Canada:
First-Time Home Buyer Incentive (FTHBI)
This program helps reduce your monthly mortgage payments by offering a shared equity mortgage. The government contributes:
- 5% for existing homes
- 10% for new homes
You repay this amount when you sell the home or after 25 years.
Home Buyers’ Plan (HBP)
You can withdraw up to $35,000 from your RRSP to help with the down payment. If you’re buying with a partner, you can both withdraw, up to $70,000 in total. You need to repay it within 15 years.
First-Time Home Buyer Tax Credit (HBTC)
This tax credit gives you $750 back when you buy your first home. It’s a $5,000 credit applied to your taxes.
GST/HST New Housing Rebate
If you buy a new home, you can get a rebate on the GST/HST you paid. This can be up to $6,300 depending on the cost of the home.
Provincial Programs
Different provinces also have their own help for first-time buyers. For example:
- Ontario: Offers a land transfer tax refund.
- British Columbia: Provides a land transfer tax exemption for homes below certain prices.
Pro Tip: Talk to a mortgage broker to help you figure out which programs you qualify for and find the best deal for your situation.
Key Takeaways
Buying your first home is exciting, but it can be a bit confusing too. Knowing what to expect can make the process much easier. If you’re open to options like a multi-unit residential mortgage in Canada, you might even find a property that helps pay for itself. Here are some simple steps to get started:
Get Pre-Approved: Know how much you can afford and show sellers you’re serious.
Find a Good Agent: An agent helps with listings, negotiating, and paperwork.
Look for Government Programs: Programs like the First-Time Home Buyer Incentive can save you money.
Do a Home Inspection: Check for hidden issues before buying.
Plan for Closing Costs: Set aside extra money for costs like lawyer fees and taxes.
Ready to Start?
Contact AJP Mortgage today to make your home-buying dream come true!
