Buying a home
Becoming a homeowner can be very exciting, but it’s not always the best decision for everyone. Before buying a home, such as a house or a condo, make sure you consider all costs.
According to Canada Mortgage and Housing Corporation (CMHC), your monthly housing costs should not be more than about 39% of your gross (before deductions) monthly income. These costs include your mortgage payments, property taxes and heat costs.
Your entire monthly debt load should not be more than 44% of your gross monthly income. This includes your mortgage payments and all your other debts, such as loan or credit card payments.
Use the Mortgage Qualifier Tool to see if you can qualify for a mortgage to buy a home.
Use this CMHC step-by-step guide to learn more about buying a home in Canada.
Saving for your home
To buy your home, you’ll need a down payment. To accumulate the amount you need, make saving part of your budget. Most employers deposit your pay directly into your bank account. Set up automatic transfers to a savings account for each pay period.
Find out how much you need for a down payment to purchase a home.
You’ll want to keep the money you save protected and easily accessible. Short-term savings and investment options can include savings accounts, guaranteed investment certificates (GIC) and low-risk mutual funds. Ask your financial institution about the short-term investments they offer and how your money is protected.
Use the Financial Goal Calculator to see how long it will take you to reach your savings goal.
Tax-Free Savings Account
A Tax-Free Savings Account (TFSA) lets you save or invest your money tax-free. You won’t pay tax on money you withdraw from your TFSA. You can also use your TFSA to help you buy a home.
Learn more about the Tax-Free Savings Account.
Registered Retirement Savings Plan
A Registered Retirement Savings Plan (RRSP) allows you to save money for your retirement. You don’t pay taxes on your savings until you withdraw money from the RRSP. You can also use your RRSP to help you buy a home.
Learn more about the Registered Retirement Savings Plan.
Deposit insurance protects your savings if your financial institution fails. The Canada Deposit Insurance Corporation (CDIC) automatically insures your eligible deposits. This applies to deposits held at CDIC member institutions in Canada.
Find out if your financial institution is a member of CDIC.
Home buying programs and incentives
The Government of Canada offers home buying programs and incentives for homebuyers. These can help you purchase your home. The programs and incentives include the following:
- The Home buyers’ amount
- You may be eligible to receive a non-refundable tax credit of up to $750. ($1,500 proposed in Budget 2022)
- GST/HST new housing rebates
- You may be eligible for a rebate for some of the tax you pay when buying your home.
- The Home Buyers’ Plan (HBP)
- You may withdraw up to $35,000 from your registered retirement savings plan (RRSP) tax-free to buy your first home.
Learn more about these home buying programs and find out if you’re eligible.
- The First-Time Home Buyer Incentive
- You may receive 5% or 10% of your home's purchase price for a down payment.
Learn more about the First-Time Home Buyer Incentive.
- The Tax-Free First Home Savings Account (FHSA)
- Proposed in Budget 2022, the FHSA would allow you to save $40,000 tax-free to buy a home. Canadians can expect an annual contribution limit of $8,000 in year 2023.
Learn more about the proposed introduction of the FHSA.
Your provincial or territorial government may also offer other home buying programs and incentives.
Contact your provincial or territorial government to learn more about their programs.
Getting preapproved for your home
Before you start looking for the home you’d like to purchase, get preapproved for a mortgage. Once you know what amount you qualify for, you can start looking for the home that is right for you and your budget.
Learn more about getting preapproved for a mortgage.
Finding your home
To find the home you want to buy, do your research. There are many websites, online resources and mobile applications (apps) to help you find the right home for you. Realtors can also help you with your research.
Using a realtor is optional. A realtor usually searches for homes, negotiates a purchase price, fills out and files paperwork and more. The seller pays the realtor’s fees when you buy a home.
Learn more about how a realtor is involved in the home buying process.
Paying for your home
A mortgage is probably the biggest loan you’ll get in your lifetime. It’s important that you understand the process.
Learn how to prepare yourself to get a mortgage.
Shop around to get the mortgage that is right for you. Mortgages have different features to meet different needs. It’s important that you understand them before you decide.
Learn how to choose a mortgage that is right for you.
Home buying costs
When you buy a home, you have to pay for upfront costs in addition to your mortgage. Upfront or closing costs are one-time fees that you have to pay when you buy a home. You usually pay these costs by the time the sale is completed. Examples include home inspection fees, legal fees, property tax adjustments and title insurance. Be prepared to spend between 1.5% and 4% of the home’s purchase price on these costs.
Learn more about additional costs when you buy a home.
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