How to buy a home in Canada.

Buying a home in Canada is the largest single financial commitment most people ever make. The fastest way to make it work is to spend a few hours being honest with yourself before you spend a year house-hunting.

You need clarity on three things:

• What you can actually afford. Not what the bank approves you for — what you can comfortably pay every month while still saving and living.
• What you genuinely need. Bedrooms, location, commute, schools. Distinguish hard requirements from preferences.
• Your timeline. Are you buying this year, or are you exploring? The strategy is different.

Mortgage pre-approval should be your first move — before you tour a single home. It tells you exactly what you can borrow, locks in a rate for 90–120 days, and signals to sellers that you're serious when you make an offer.

How much you can afford

In Canada, most lenders use two ratios:

• GDS (Gross Debt Service): Mortgage + property taxes + heating + 50% of condo fees should be no more than 39% of gross household income.
• TDS (Total Debt Service): All debt obligations (GDS + car payments, credit cards, student loans) should be no more than 44%.

As of 2026, all federally regulated Canadian mortgages must pass the mortgage stress test — meaning you qualify at the higher of your contract rate + 2%, or 5.25%, whichever is greater.

Down payment minimums

• Under $500,000: 5% minimum
• $500,000–$1,500,000: 5% on first $500K, 10% on the balance
• Over $1,500,000: 20% minimum (no CMHC insurance available)

If your down payment is under 20%, you'll pay CMHC mortgage default insurance — typically 2.8–4.0% of the loan amount, added to the mortgage.

A buyer's agent in Canada is your representative — they work for you, not the seller. Their job is to find the right property, advise on price, write the offer, and negotiate hard on your behalf.

New CREA rules (effective 2024) require a written buyer representation agreement before an agent shows you property. This formalizes the relationship and discloses how the agent is paid (typically out of the seller's commission, but disclosed in writing).

Choose your agent the same way you'd choose a surgeon: by track record, not by personality.

• Closed transactions in your neighbourhood and price band over the last 12 months
• List-to-sale ratio on the buyer side (do they consistently negotiate below list?)
• Days-on-market behaviour (do they move fast on the right properties, or hesitate?)
• References from buyers in your price tier

See our full guide on choosing an agent →

With your pre-approval and your agent in place, you start touring. The biggest mistake first-time buyers make is widening the search every time they see something — chasing every listing dilutes your time and your decision quality.

Stay disciplined:

• Define 3–5 neighbourhoods. Tour each thoroughly before adding new ones.
• See properties in person. Photos lie, neighbourhoods lie, video walkthroughs lie. Floors slope. Neighbours are loud. Light is bad.
• Visit at different times — Tuesday evening, Saturday morning, Sunday night.
• Don't tour above your pre-approval. You'll fall in love and regret it.

Expect to view 15–30 properties before making an offer in a slow market, 5–15 in a fast one. If you've seen 50 and still haven't moved, your criteria are wrong, not the market.

Once you've found the right property, your agent prepares the offer (the Agreement of Purchase and Sale). The key components:

• Price. Your agent recommends a range based on closed comparables. Trust the data, not your enthusiasm.
• Deposit. Typically 5% of purchase price, held in trust by the listing brokerage until close.
• Closing date. Usually 30–60 days out. Negotiate to match your needs.
• Conditions. Financing approval (usually 5 business days), home inspection (5–7 days), status certificate review for condos (10 days).
• Inclusions / exclusions. Appliances, light fixtures, window coverings — get it in writing.
• Irrevocable date. The deadline by which the seller must respond. Typically 24–48 hours; shorter in competitive markets.

In bidding-war situations, you may be asked to submit a "bully offer" (pre-emptive, above list) or compete on offer day. Conditions get dropped in these scenarios — which is risky. Have your inspection and financing largely settled before you compete.

If your offer is accepted, you typically enter a 5–10 day conditional period to confirm financing and inspect the property.

Home inspection

Hire a licensed inspector. Walk through with them. Pay attention to:

• Roof age and condition
• HVAC age and maintenance
• Electrical panel (knob-and-tube? aluminum wiring?)
• Plumbing (galvanized? lead pipes? recent reno work?)
• Foundation cracks and moisture
• Insulation in the attic

Inspections in Canada are generally non-destructive — inspectors look but don't open walls. They can identify symptoms, not always causes. Significant findings give you negotiating leverage to either reduce the price or walk.

Financing approval

Pre-approval is conditional on the actual property. The lender will appraise the property to confirm value. If the appraisal comes in below your purchase price, you may need to either bring more down payment or renegotiate.

Beyond your down payment, expect to budget 1.5–4% of purchase price in closing costs:

• Land Transfer Tax. Varies dramatically by province. Toronto buyers pay both Ontario LTT and a municipal Toronto LTT — often $20,000–$60,000+ on a single home.
• Legal fees. $1,500–$2,500 for a typical residential closing.
• Title insurance. $250–$500 one-time.
• Home inspection. $400–$800.
• Appraisal. $300–$600 if your lender requires one.
• CMHC insurance. If your down payment is under 20%, this is rolled into your mortgage but you pay PST on it upfront in some provinces.
• Property tax & utility adjustments. The seller has typically pre-paid some taxes and utilities; you reimburse them at close.
• Moving costs. $500–$3,000+ depending on distance and volume.

First-time buyers may qualify for the First-Time Home Buyer's Tax Credit, a Land Transfer Tax rebate (varies by province), and the FHSA / Home Buyers' Plan for tax-advantaged savings. More on first-time buyer programs →

On the closing date, your lawyer:

• Receives your down payment + closing funds
• Receives the mortgage from your lender
• Pays the seller's brokerage and lawyer
• Registers the deed and mortgage with the provincial land registry
• Gives you the keys (often via the listing agent or seller's lawyer)

Most closings are now electronic. You'll have done a final walk-through of the property in the days before close to confirm condition. By end of day, you own the home.

Then the slow part begins. Furniture. Internet. Forwarding mail. Discovering the previous owner's idiosyncrasies. That part is on you.