Buying Your First Home

Buying your first home is a long list of small decisions, and most of them are easier when you know the order they come in. This guide walks through the whole path, from working out what you can afford to getting the keys.

Step 1: Work out what you can really afford

A mortgage payment is only part of what a home costs each month. When you set a budget, count:

• The mortgage payment itself
• Property tax
• Heating, hydro and water
• Home insurance
• Condo fees, if you are buying a condo
• Maintenance, even on a newer home (a common rule of thumb is to set money aside every month)

Then count the cash you need on the day you buy: your down payment plus closing costs. First-time buyers often plan for the down payment and are surprised by the closing costs. The Mortgage & Closing Costs Guide breaks those down.

Step 2: Build your down payment

Two federal accounts are designed for first-time buyers. Check the details with the Canada Revenue Agency before you rely on them, because eligibility rules apply to both.

• First Home Savings Account (FHSA). Contributions are tax-deductible, and qualifying withdrawals to buy a first home are tax-free. The CRA lists $8,000 of participation room in the year you open one, and $40,000 as the lifetime limit you can deduct, and unused room carries forward only up to a limit, so read the CRA page before planning around it.
• Home Buyers’ Plan (HBP). You can withdraw from your RRSP to buy or build a qualifying home. The CRA lists the current withdrawal limit as $60,000. For withdrawals made from 2026 to 2028, repayment is deferred to the fifth year after the year of your first withdrawal.

How much down payment is the minimum? Under the federal rules in force since December 15, 2024, an insured mortgage (one with less than 20% down) needs at least 5% on the first $500,000 of the price and 10% on the part above that, for homes priced below $1.5 million (insured mortgages are not available at $1.5 million or more). First-time buyers can also choose a 30-year amortization on an insured mortgage. A mortgage professional can tell you how this applies to your situation, and whether the rules have changed since this page was last checked.

Step 3: Get a mortgage pre-approval

A pre-approval is a lender telling you roughly how much they would lend you, and at what rate, based on your documents. It is not a guarantee, and it is not the final approval for a specific home. It does give you a realistic price range and usually holds a rate for a set period.

Lenders typically ask for:

• Government ID
• Proof of income: recent pay stubs, an employment letter, and tax documents such as your Notice of Assessment
• Proof of your down payment, usually through account statements showing where the money has been
• Details of your debts and credit

Lenders also check that you could still afford the payments if rates were higher than your contract rate (the “stress test”), so the amount you are approved for can be lower than you expect.

Step 4: Decide what you are looking for

Write two lists: what you need (location, commute, bedrooms, budget ceiling) and what you would like (a yard, a finished basement). Then decide on the type of home:

• Freehold (detached, semi-detached, townhouse you own outright)
• Condo (you own a unit and share the building; see the Condo Buying Guide)
• Pre-construction (a home that is not built yet; see the Pre-Construction Guide)

Step 5: Work with an agent in writing

In Ontario, a brokerage must put its agreement with you in writing. The agreement sets out what services they will provide, how they are paid, when it expires and how it can be ended. The expiry date must be shown prominently and you initial it. Read it before you sign, and ask about anything that is unclear, including what happens if you buy a home through a different route.

Step 6: Make an offer

An offer (the Agreement of Purchase and Sale) is a legal contract once accepted. The main parts are:

• Price
• Deposit, which is paid with the offer and held in trust
• Conditions, such as financing, a home inspection, or, for a condo, a review of the status certificate
• Irrevocability date, the time until which your offer stays open
• Closing date, when the sale completes and you get the keys

Conditions give you a way out if something checks out badly, but they also make an offer less attractive to a seller in a competitive situation. Your agent can explain the trade-off for each home. See the Home Buying Guide for more.

Step 7: Conditions and your lawyer

Once your offer is accepted you will arrange the inspection, finalize your mortgage, and hire a real estate lawyer. The lawyer reviews the agreement, searches the title, prepares the closing documents, and handles the transfer of funds. Hiring one early, before you make an offer, is often a good idea so you can ask questions about a specific agreement.

Step 8: Closing and moving in

Before closing you will usually:

• Confirm home insurance is in place from the closing date
• Do a final walkthrough to check the home is in the condition agreed
• Sign documents with your lawyer
• Send your remaining funds to your lawyer

On closing day your lawyer registers the transfer and you receive the keys.

Money back for first-time buyers

Three programs can reduce what you pay. Each has its own conditions, so check the official page before you count on it.

Verified on 4 October 2026.

• Ontario land transfer tax refund: up to $4,000. Since 2017, qualifying first-time buyers pay no Ontario land transfer tax on the first $368,000 of the purchase price. You must be at least 18, have never owned a home anywhere in the world, be a Canadian citizen or permanent resident, and move in within 9 months.
• Toronto municipal land transfer tax rebate: up to $4,475, for homes in the City of Toronto. Similar conditions apply.
• GST relief on new homes: the federal first-time home buyers’ rebate removes the GST on new or substantially renovated homes valued up to $1 million, with a partial rebate between $1 million and $1.5 million.

Mistakes first-time buyers often make

• Treating the pre-approval amount as the budget instead of the limit
• Forgetting closing costs and moving costs
• Skipping the inspection to be more competitive, then finding a costly problem later
• Not reading the condo documents or the conditions in the agreement
• Changing jobs or taking on new credit between pre-approval and closing

Questions to ask yourself before you offer

• Could I pay the mortgage comfortably if my income dipped or rates rose?
• Do I know what the home will cost me each month beyond the mortgage?
• Have I seen the inspection report, and do I understand it?
• Does this home still work for me in five years?