Getting rid of lots of shady ads for house sales? Here is the perfect solutions with the best tips for first time home buyers Canada.
Buying your first home in Canada is an exciting step, but it can also feel a bit overwhelming. You might be asking yourself, “How much can I afford?” or “What should I know about the process?” Don’t worry—these questions are normal, and we’re here to help.
Whether you’re looking for a condo in the city or a house in the suburbs, there are some simple steps to follow. From setting your budget to understanding your down payment and closing costs, we’ll guide you through everything you need to know.
In this guide, we’ll cover the most important tips to make your home-buying journey easier. By the end, you’ll feel more confident and ready to take the next steps. Let’s dive in!
Canada Market Statistics 2024
The Canadian housing market forecast for 2025 shows steady growth with some regional variation:
Home Prices
The national average home price is projected to increase to around $713,375 by 2025, which reflects a 4.4% rise compared to 2024, when the average price is expected to be $683,200.
Home Resales
Sales volume is expected to reach 501,902 units in 2025, showing a 6.2% increase from 2024’s projected sales of 484,400 units.
Interest Rates
Although interest rates have been high in early 2024, there are expectations of some reductions, which could encourage more activity in the market as 2025 progresses.
Regional Trends
Cities like Toronto and Vancouver are likely to experience higher-than-average price growth, while smaller markets may provide more affordable opportunities for buyers.
Overall, 2025 looks to be a year of recovery for the Canadian housing market, with moderate price increases and stronger sales volumes, despite ongoing challenges related to interest rates and supply.
Best Tips for First Time Home Buyers Canada
Buying your first home in Canada? Discover the best tips to make smart decisions, avoid common pitfalls, and secure your dream home with ease.
Pre-Purchase Planning
Set yourself up for success with smart pre-purchase planning. Learn how to budget, research, and prepare for a smooth home-buying journey
Budgeting
Set a clear budget for buying a home. Think about the down payment, closing costs, and extra costs like property taxes, utilities, and insurance. Make sure you can afford the mortgage along with these ongoing expenses.
Example: A couple buys a $350,000 house with a 5% down payment ($17,500) and closing costs like lawyer fees ($2,500) and property taxes ($4,000/year).
Credit Score
Your credit score affects your mortgage rate. A higher score means a lower interest rate, which can save you money. Check your score and try to improve it if needed.
Example: Sarah has a credit score of 750, getting a low mortgage rate. Mark has a 620 score, which means a higher rate and higher monthly payments.
Choosing a Real Estate Agent
Find an agent who knows the area well and understands your needs. They will guide you through the process and help with negotiations.
Example: Emily works with an agent who knows Vancouver’s market and finds homes that match her budget.
First-Time Home Buyer Programs
Unlock the door to your first home with exclusive programs for first-time buyers. Learn about the financial assistance and benefits available to make your dream home a reality.”
First-Time Home Buyer Incentive (FTHBI)
This program offers a loan from the government to help lower your mortgage payments. You don’t need to pay it back until you sell the home or after 25 years.
Example: Sarah uses the FTHBI to reduce her mortgage by 10% on a new home, which lowers her monthly payments.
Home Buyers’ Plan (HBP): You can take up to $35,000 from your RRSP to put toward your down payment. It helps if you don’t have enough saved for a full down payment.
Example: Jason takes $25,000 from his RRSP to help pay for his down payment, making it easier for him to buy his first home.
First-Time Home Buyers’ Tax Credit (HBTC)
This gives you a tax break after buying your first home, which can save you up to $750.
Example: Emily claims the HBTC on her taxes and saves money after buying her home.
Getting Pre-Approved
Take the first step toward your dream home by getting pre-approved. Learn how it simplifies your home search and strengthens your offer.
Understanding Pre-Approval
Getting pre-approved for a mortgage means the bank checks your finances and tells you how much you can borrow. This helps you focus on homes within your price range and gives you an edge when making an offer.
Example: Mark is pre-approved for a $500,000 mortgage, so he knows exactly what he can afford.
Mortgage Options
There are different types of mortgages, such as fixed-rate or variable-rate. Think about your risk and how long you plan to stay in the home when choosing the right one for you.
Example: Michelle picks a fixed-rate mortgage for stable payments, while John prefers a variable-rate mortgage to possibly save money in the short term.
Working with a Mortgage Broker
A mortgage broker can help you find the best rates by comparing different lenders. They make the process easier and save you time.
Example: Kevin uses a broker who finds him a great deal from a smaller lender, saving him money.
House Hunting
Find the perfect home with a focused approach to house hunting. Learn how to identify the right property that meets your needs and budget.
Online Tools and Resources
Use apps and websites to browse homes in your budget and preferred location. You can quickly see pictures and details of homes that meet your needs.
Example: James uses a real estate app to find homes in Toronto with at least three bedrooms and under $500,000.
Attending Open Houses
Open houses let you walk through the property, see its condition, and ask the listing agent any questions. It’s a great chance to decide if the home is right for you.
Example: Claire visits an open house and sees that the kitchen needs an update, so she keeps looking at other homes.
Making an Offer
When you find a home you like, make an offer. You can negotiate the price and include conditions, like a home inspection, to protect yourself.
Example: Daniel makes an offer on a house for $450,000, $10,000 less than asking. He also asks for a home inspection.
Home Inspection
Ensure your dream home is a sound investment with a thorough home inspection. Learn why it’s a step you can’t afford to skip.
Importance of a Home Inspection
A home inspection helps you find problems with the property before you buy. This can save you from expensive repairs down the road.
Example: Laura has an inspection done and finds a cracked foundation. She uses this to negotiate a lower price.
What to Look for
The inspection checks for issues like plumbing, electrical systems, mold, and roof damage. Be sure to look at the condition of the home’s major systems.
Example: The inspector finds a leaky roof, which can cost a lot to fix. This could help you decide whether to negotiate or walk away.
Hiring a Qualified Inspector
Choose an experienced and certified inspector who knows about the type of home you’re buying. They should help you understand any issues with the property.
Example: Sarah hires an inspector who specializes in older homes and finds a few problems with the plumbing that she can plan for.
Financing the Purchase
Financing your home purchase doesn’t have to be complicated. Learn how to choose the right mortgage and secure the best deal for your new home.
Down Payment
In Canada, the minimum down payment is 5% for homes under $500,000. If you buy a more expensive property, you may need a larger down payment.
Example: Kevin buys a $400,000 home and puts down 5% ($20,000). More expensive homes require a bigger down payment.
Closing Costs
Be prepared for closing costs like lawyer fees, land transfer taxes, and insurance. These can add up to about 3-5% of the home’s price.
Example: For a $400,000 home, closing costs might be around $12,000.
Mortgage Insurance
If your down payment is less than 20%, you’ll need mortgage insurance. This protects the lender if you can’t make your payments.
Example: Emma puts down 5% on a $350,000 house, so she pays for mortgage insurance, which adds extra to her monthly payments.
Closing the Deal
You’re almost there! Learn the final steps to closing the deal and officially becoming a homeowner with confidence.
The Closing Process
Closing is when you sign the papers, finalize the mortgage, and pay your down payment. The home officially becomes yours after this process.
Example: Sam signs the closing documents and pays the down payment, getting the keys to his new home.
Transferring Ownership
Once the deal is closed, the title of the property is transferred to your name. You are now the official owner.
Example: After closing, Daniel’s lawyer registers the deed, and he gets the keys to his home.
Post-Closing Considerations
Once you move in, remember to budget for property taxes, maintenance, and home repairs. These will be part of your ongoing costs.
Example: Leah plans ahead for property taxes and home maintenance, so she’s not surprised by unexpected costs.
Homeownership Costs Beyond the Mortgage
Homeownership goes beyond just the mortgage. Learn about the additional costs—like maintenance, taxes, and utilities—that you’ll need to plan for when buying your home.
Utilities
This includes bills for electricity, water, heating, and internet. These costs can vary each month.
Example: Alex keeps track of his monthly utilities like electricity and water, on top of his mortgage.
Maintenance and Repairs
Homes need regular upkeep, like fixing leaks or mowing the lawn. It’s important to budget for these.
Example: Sarah sets aside $200 each month for home repairs and maintenance.
Upgrades and Improvements
You might want to renovate or make improvements to your home. These can be big costs, so plan ahead.
Example: James saves up for future projects like a kitchen upgrade or new flooring.
Common Doubts of First Time Buyer
First-time homebuyer? It’s normal to have questions! Learn how residential mortgage lenders can help you navigate your concerns and make confident decisions on your journey to homeownership.
How much do first-time home buyers have to put down in Canada?
First-time homebuyers in Canada usually need to put down 5% of the purchase price for homes under $500,000. If the home is priced over $500,000, the down payment increases. For homes between $500,000 and $999,999, buyers must pay 5% on the first $500,000, and 10% on the amount over $500,000. For homes over $1 million, the minimum down payment is 20%.
Example: If you’re buying a home for $600,000, you’ll pay 5% of the first $500,000 ($25,000) and 10% of the remaining $100,000 ($10,000), totaling $35,000.
What’s your best advice for first-time homebuyers?
Get pre-approved for a mortgage: This tells you how much you can borrow, helping you stay within your budget.
Stick to your budget: Don’t stretch your finances too far—buy a home you can afford long term.
Don’t skip the home inspection: A home inspection helps find hidden issues, like leaks or structural damage, which could save you money in the future.
Example: Sarah, a first-time buyer, almost skipped the inspection to save money, but after advice from her mortgage broker, she went ahead with it. The inspection found hidden issues, which saved her thousands later.
What are the rules for first-time buyers in Canada?
First-time buyers can take advantage of helpful programs to make purchasing a home easier:
Home Buyers’ Plan (HBP): This program lets you borrow up to $35,000 from your RRSP for your down payment, which you can pay back over 15 years without paying taxes on the withdrawal.
First-Time Home Buyer Incentive: The government will contribute 5% for existing homes or 10% for new homes toward your down payment, reducing the amount you need to borrow.
Example: Jason, buying his first home in Ontario, used the HBP to take $25,000 from his RRSP. This helped him cover part of his down payment.
What is the average age to buy your first home in Canada?
The average age of first-time homebuyers in Canada is around 34 years old. Many people buy their first home in their early 30s after saving for a down payment and achieving financial stability.
Example: Buyers in cities like Toronto or Vancouver may wait longer, as the higher cost of living and expensive housing can require more time to save for a down payment.
How AJP Mortgage Can Help?
Ready to buy your dream home? AJP Mortgage is known as the best house mortgage broker for a reason. Find out how we can simplify the process and get you the best deal.
Expert Advice
We provide personalized advice tailored to your finances to help you choose the right mortgage for your needs.
Example: Sarah, a first-time buyer in Ontario, didn’t know whether to pick a fixed-rate or variable-rate mortgage. AJP Mortgage helped her choose the right one, saving her money in the long run.
Access to Many Lenders
We connect you with a variety of lenders, ensuring that you get the most competitive mortgage rates available.
Example: Mark and Julia were struggling to find a good mortgage rate. With AJP Mortgage’s help, they secured a great rate and saved on interest.
Pre-Approval Help
We assist you in getting pre-approved for a mortgage quickly, giving you a clear understanding of your budget before you start looking for homes.
Example: Alex got pre-approved fast with AJP Mortgage, making his home search much easier and more confident.
Government Program Support
Take advantage of government programs like the Home Buyers’ Plan (HBP) and First-Time Home Buyer Incentive, which can make your down payment more affordable.
Example: Olivia in Calgary used the First-Time Home Buyer Incentive to lower her down payment, making it easier to buy her first home.
Simplified Process
We manage all the complex paperwork and legal details, making the process as stress-free as possible for you.
Example: John and Lisa worked with AJP Mortgage to quickly finish all paperwork and move into their new home without hassle.
Customized Mortgage Options
We offer customized mortgage plans based on your preferences, whether you need lower monthly payments or long-term stability.
Example: Emily, a single mom, got a mortgage with lower payments, making it easier to manage her budget and save for the future.
Ongoing Support
Even after you purchase your home, we’re here to offer ongoing support and advice for refinancing, renewals, or any questions you have.
Example: After buying their home, Sarah and Tom contacted AJP Mortgage to ask about refinancing, and we helped them get a better deal.
AJP Mortgage makes the home-buying process simpler. We’re here to guide you every step of the way. Let us help you get into your dream home!
Conclusion
This guide is here to make the home-buying process easier for first-time buyers in Canada. While buying a home is a big step, it doesn’t have to feel overwhelming.
By taking a thoughtful approach to budgeting, exploring mortgage options, and using available first-time buyer programs, you can set yourself up for success. With the right research and expert advice, you can avoid common pitfalls and feel confident in your decisions every step of the way.
Owning your first home is exciting and achievable. With a bit of preparation, you can turn this dream into a reality.
Want to get started? Reach out to us to get best mortgage solutions today to help guide you through the process and set you on the path to homeownership!
