First-Time Home Buyer Guide in Canada
Everything you need to know before buying your first home.
Buying your first home in Canada is a big step. This guide walks through the main programs, costs, and steps so you can plan with confidence.
Know what you can afford
Before shopping for a home, get a realistic view of your budget. Lenders look at two ratios — GDS (housing costs ÷ income) and TDS (all debts ÷ income).
- GDS target: around 39% or less
- TDS target: around 44% or less
- Keep an emergency fund — don't drain savings into the down payment
Save your down payment
Minimums are 5% on the first $500,000 and 10% on the portion between $500,000 and $1.5M. Below 20% you must pay CMHC/SCHL insurance.
First-time buyer programs
- First Home Savings Account (FHSA) — tax-deductible contributions, tax-free withdrawals for a first home
- Home Buyers' Plan (HBP) — withdraw up to $60,000 from your RRSP
- First-Time Home Buyer Tax Credit — up to $1,500 federal credit
- Provincial land transfer tax rebates (e.g. Ontario, BC, Toronto)
Get pre-approved
A pre-approval locks in a rate for 90–120 days and tells you the maximum mortgage you qualify for. It also shows sellers you're serious.
Plan for closing costs
Budget 1.5%–4% of the purchase price for land transfer tax, legal fees, inspection, title insurance, and adjustments.
Key takeaways
- Aim for a 20% down payment to skip CMHC insurance — but don't wait forever
- Use FHSA + HBP together for the most tax-efficient down payment
- Get pre-approved before house-hunting
- Budget for closing costs on top of the down payment
Sources used
Disclaimer: This guide is for educational purposes only and does not constitute financial, mortgage, legal, or tax advice. Always verify details with qualified professionals and financial institutions.