Instagram Youtube Facebook Google

A Simple First-Time Home Buyer’s Guide

As a mortgage broker, my goal is to make sure my clients are as prepared as possible before they start the home-buying process. Buying your first home can feel overwhelming, so I’ve put together a simplified guide to help you understand what to expect and how to prepare.

How Much Can You Afford to Spend on Your New Home?

Before you start looking at homes, it’s important to have a realistic understanding of what you can comfortably afford each month—not just what a lender may approve you for.

When determining affordability, think about:

  • Your monthly mortgage payment

  • Property taxes

  • Heating and electricity

  • Condo fees (if applicable)

  • Other regular expenses like car payments, student loans, and credit cards

A good starting point is to make sure your housing costs still allow room in your budget for savings, lifestyle expenses, and unexpected costs. Just because you qualify for a certain amount doesn’t always mean it’s the right amount for you.

A mortgage pre-approval can help narrow this down and give you a clear price range before you start shopping.

Assemble the Right Team

Buying a home is not a solo effort. Surrounding yourself with the right professionals can save you time, money, and stress.

Real Estate Agent
A licensed professional who negotiates price, prepares offers, and manages paperwork. Choose someone who knows the neighbourhoods you’re considering and understands first-time buyers.

Mortgage Broker
Brokers have access to dozens of lenders, including major banks. A broker helps structure your mortgage properly and explains your options clearly so there are no surprises later.

Real Estate Lawyer
Your lawyer handles the legal side of the transaction and closing process. You’ll usually meet with them one to two days before completion to sign documents and review closing costs.

Home Inspector
A home inspector identifies visible issues with the property, including structure, roofing, plumbing, electrical, and heating systems. This step can help you avoid costly surprises.

Financial Planner
A financial planner helps ensure that buying a home fits into your broader financial picture. They can help you build a realistic budget and avoid becoming house-poor.

Which Type of Property Is Right for You?

Condo

Condos are often ideal for buyers who want to be close to work, shopping, and entertainment. Maintenance is minimal compared to detached homes. Be mindful of condo fees, parking costs, and commuting time if you frequently travel outside the city.

Single-Family Home

Detached homes offer privacy and flexibility to renovate or landscape as you wish. If you’re buying an older home, be prepared for ongoing maintenance and potential upgrade costs.

Townhouse

Townhouses offer ownership freedom without condo fees. Keep in mind that neighbouring owners have the same renovation rights you do, which can impact noise or shared aesthetics.

New Construction or Resale: Which Is Better?

With so many new developments available, this is a common decision for first-time buyers.

Buying New
New homes often allow for customization and usually require fewer immediate repairs. They’re covered under a builder’s warranty, but upgrades can add up quickly. Construction delays are common, so flexibility is important.

Buying Resale
Resale homes may require renovations or updates, but they’re often located in established neighbourhoods close to schools, transit, and amenities. In most cases, GST does not apply.

Mortgage Terms You Should Know

  • Open Mortgage: Can be paid off early without penalty, but usually comes with a higher interest rate

  • Closed Mortgage: Cannot be fully paid off before the term ends without penalties

  • High-Ratio Mortgage: Requires mortgage insurance because the down payment is less than 20%

  • Conventional Mortgage: No mortgage insurance required because the down payment is 20% or more

  • Variable-Rate Mortgage: Interest rate can change over time

  • Fixed-Rate Mortgage: Interest rate stays the same for the full term

  • First-Time Home Buyer: Someone who has never owned a principal residence before

Saving for the Down Payment

You’ll need at least 5% of the purchase price as a down payment.

For example, on a $500,000 home, a 5% down payment is $25,000.
If you put down less than 20%, mortgage insurance is required and is added to your mortgage amount.

Programs That Can Help First-Time Buyers

Home Buyers’ Tax Credit
Eligible buyers can claim $5,000, providing up to $750 in federal tax relief.

Home Buyers’ Plan
You can withdraw up to $25,000 from your RRSP, tax-free, to buy or build a qualifying home. The amount must be repaid over time.

If you’d like help understanding what makes sense for your situation, we would love to support — reach out to our team!