# How to Buy Your First Home in Canada: A Step-by-Step Guide for Newcomers # How to Buy Your First Home in Canada as a Newcomer Buying a home in Canada as a newcomer is absolutely possible — but the process has specific steps, eligibility rules, and Canadian-only programs that most people don't know exist until they've already missed out. Here's the complete picture. --- ## Step 1: Know When You're Eligible to Buy As a newcomer, your ability to get a mortgage depends on your immigration status: | Status | Eligible? | Notes | |---|---|---| | Permanent Resident (PR) | ✅ Yes | Same as Canadian citizen | | Work Permit (open or closed) | ✅ Yes | With minimum 2-year work permit remaining; must have Canadian credit history or larger down payment | | Study Permit | ⚠️ Limited | Some lenders accept with co-signor or larger down payment | | Visitor / Tourist | ❌ No | Cannot obtain Canadian mortgage | **Banking as a newcomer:** Open a Canadian bank account immediately upon arrival. Every month of Canadian banking history counts toward your [credit file](https://maplesyrupmoney.com/blog/article.html?slug=does-credit-score-transfer-canada-newcomer-guide). Without 2+ years of Canadian credit history, you'll likely need 20–35% down payment to qualify. --- ## Step 2: Build Your Down Payment The minimum down payment in Canada is income-tested: | Purchase price | Minimum down payment | |---|---| | Up to $500,000 | 5% | | $500,001 – $999,999 | 5% on first $500K + 10% on remainder | | $1,000,000 and over | 20% (no CMHC insurance available) | **Best vehicles for your down payment:** - **[FHSA (First Home Savings Account)](https://maplesyrupmoney.com/blog/article.html?slug=fhsa-for-newcomers-canada-guide-2026)** — $8,000/year, $40,000 lifetime, contributions are tax-deductible, withdrawals for a qualifying home are tax-free. This is the most efficient vehicle for first-time buyers. Open it the day you can. - **[TFSA](https://maplesyrupmoney.com/blog/article.html?slug=tfsa-for-newcomers-canada-guide-2026)** — Tax-free growth, flexible access. After FHSA is maxed, park additional savings here. - **[RRSP Home Buyers' Plan (HBP)](https://maplesyrupmoney.com/blog/article.html?slug=fhsa-vs-rrsp-first-home-canada-2026)** — Withdraw up to $60,000 from your RRSP tax-free for a first home, repayable over 15 years. Use this after FHSA is exhausted. --- ## Step 3: Get Pre-Approved Before you look at a single property, get a mortgage pre-approval from at least two lenders. Pre-approval tells you: - How much you can borrow - What rate you'll likely pay (held for 90–120 days) - Whether any issues exist in your credit file **Where to get pre-approved:** - **Big 6 banks** — TD, RBC, Scotiabank, BMO, CIBC, National Bank - **Mortgage brokers** — shop multiple lenders in one conversation; often find better rates. Free to you (broker is paid by the lender). - **Monoline lenders** (MCAP, First National) — competitive rates, broker-accessible A mortgage broker is usually the right move for newcomers — they know which lenders are flexible on credit history and can match you to the right product. --- ## Step 4: Pass the Stress Test The **[mortgage stress test](https://maplesyrupmoney.com/blog/article.html?slug=mortgage-stress-test-canada)** (B-20 Guideline) requires you to qualify at the higher of: - **5.25%**, or - **Your contracted rate + 2%** Even if you're offered a 4.5% mortgage rate, you must prove you can afford payments at 6.5%. This is designed to protect you from rate increases at renewal. The stress test uses your **Gross Debt Service (GDS)** and **Total Debt Service (TDS)** ratios: - **GDS ≤ 39%:** Housing costs (mortgage P+I + property tax + heat) ÷ gross income - **TDS ≤ 44%:** All debt payments ÷ gross income --- ## Step 5: Find a Property Work with a **buyer's real estate agent** (realtor). In Canada, the buyer's agent is typically paid by the seller — it costs you nothing to have representation. **Your agent should:** - Help you search MLS listings in your target area - Advise on fair market value and offer strategy - Manage the offer process, conditions, and paperwork - Coordinate with your lawyer for closing **Conditions to include in your offer:** - **Financing condition** (5–7 business days) — lets you exit if your mortgage falls through - **Home inspection condition** (5–7 business days) — independent inspector reviews the property - **Status certificate condition** (if buying a condo) — reviews condo corporation financials and minutes In competitive markets (Toronto, Vancouver), sellers sometimes reject conditional offers. Know your risk tolerance before waiving conditions. --- ## Step 6: Budget for Closing Costs Many first-time buyers are blindsided by closing costs. Budget **1.5–4% of the purchase price** on top of your down payment: | Cost | Amount | |---|---| | Land transfer tax | Varies by province + municipality | | Legal/lawyer fees | $1,500–$3,000 | | Home inspection | $400–$600 | | Title insurance | $150–$400 | | Moving costs | $500–$3,000 | | [CMHC insurance premium](https://maplesyrupmoney.com/blog/article.html?slug=cmhc-mortgage-insurance-canada-explained) | Added to mortgage (if < 20% down) | | Property tax adjustment | Depends on closing date | **First-time buyer rebates on land transfer tax:** - **Ontario:** Up to $4,000 rebate on provincial LTT - **Toronto:** Up to $4,475 rebate on municipal LTT (in addition to provincial) - **BC:** Full rebate on first $500,000 of purchase price --- ## Step 7: Close the Deal Once your offer is accepted and conditions are met: 1. **Hire a real estate lawyer** — required in Canada for property purchases. They review title, prepare closing documents, and transfer funds. 2. **Arrange insurance** — your lender requires property insurance effective closing day 3. **Final walkthrough** — inspect the property 24–48 hours before closing to confirm its condition 4. **Fund the closing** — wire down payment + closing costs to your lawyer's trust account 5. **Get your keys** — on closing day, your lawyer registers the transfer and you receive possession --- ## Canadian Programs for First-Time Buyers | Program | Benefit | |---|---| | **FHSA** | Tax-deductible contributions + tax-free withdrawals | | **Home Buyers' Plan (HBP)** | Withdraw up to $60,000 from RRSP, repay over 15 years | | **First Home Buyers' Tax Credit** | 15% federal tax credit on $10,000 = $1,500 back | | **GST/HST New Housing Rebate** | Partial rebate on GST/HST for new construction | | **Land transfer tax rebates** | Ontario, Toronto, BC for first-time buyers | --- ## The Newcomer Advantage Newcomers to Canada often bring savings, international work experience, and a strong motivation to build roots. The Canadian mortgage and real estate system rewards preparation — and you now know exactly what to prepare for. Start with your FHSA. Build your credit file. Work with a mortgage broker and buyer's agent. The home you buy will likely be the most significant asset you own. --- *Written by [Raunaq Singh](https://maplesyrupmoney.com/about), Founder of [Maple Syrup Money](https://maplesyrupmoney.com).* [Connect on LinkedIn →](https://www.linkedin.com/in/raunaq-singh-digital/) Follow us: [Instagram](https://instagram.com/maplesyrupmoneydotcom) · [Facebook](https://facebook.com/maplesyrupmoneydotcom) · [LinkedIn](https://www.linkedin.com/company/maplesyrupmoney)