Don't guess your budget - know it before you make an offer
Frank's licensed advisors compare purchase rates from 20+ lenders and guide you from your first affordability check through to closing day. We are free to use - lenders pay Frank, not you.
Every buyer's situation is different
The process looks different depending on where you're starting from. Pick your situation and follow the path from there.
First-time buyer
Your path starts with saving a down payment and understanding what you can actually afford before you start browsing listings. Talk to us about First-Time homebuyer incentives.
- Minimum 5% down payment on homes under $500,000
- FHSA + RRSP Home Buyers' Plan can accelerate savings
- CMHC default insurance applies if down payment less than 20%; premiums run 2.8%–4%
- First-time buyers' tax credit and LTT rebates available
- Pre-approval is your first real move
Moving up or upsizing
You have equity in your current home - the question is how to access it for the new purchase and line up both transactions without a financial gap in between.
- Bridge financing covers the gap between closing dates
- Existing equity replaces the need for a large new down payment
- Confirm your current mortgage is portable if you want to transfer it
- Best to have secured the sale of exisitng home before committing to a new purchase
- Stress test applies at the new lender on new purchase
New to Canada
Lenders have specific programs for newcomers - some accept foreign income and limited Canadian credit history, though the qualifying criteria differ by lender.
- Most lenders require 6–24 months of Canadian employment history
- Some accept foreign income with documentation (tax returns, payslips)
- Strong down payment (10–20%) improves access to more lenders
- CMHC has a dedicated newcomer mortgage program
- Start building Canadian credit as soon as possible after arrival
Your home buying timeline, step by step
Most buyers start too late and skip too many steps. Here's the right sequence - and the right tools for each stage.
Assess your finances and set a realistic price range
Before you look at a single listing, you need a number. A realistic one, not just the maximum the calculator spits out, but what fits your income, expenses, and long-term plans. Use the affordability calculator below to get an estimate.
- Start with gross household income - both incomes if buying jointly
- Include all existing debt payments: car loans, student loans, credit card minimums, and any other obligations
- Your target monthly budget should leave room for property tax, maintenance, and life expenses - not just the mortgage
- A target price range, not a maximum, is what you actually want - most advisors recommend staying 10–15% below your maximum
- Want the technical detail? For GDS and TDS ratio breakdowns - the exact debt-service ratios lenders use to qualify you - visit our GDS / TDS calculator.
Save your down payment and understand how mortgage default insurance helps
Your down payment size determines whether you need CMHC or private mortgage default insurance (less than 20% down requires default insurance) - and how large that premium will be. Use the calculator below to see exactly how a smaller down payment affects your total mortgage cost.
| Purchase price | Minimum down payment | CMHC insurance |
|---|---|---|
| Under $500,000 | 5% | Required |
| $500,000–$1,499,999 | 5% on first $500,000 and 10% on the rest | Required |
| $1,500,000 and above | 20% minimum | Not available - conventional only |
- Gifted down payments are allowedIf family is contributing to your down payment, the gift must come from an immediate family member and must be documented with a gift letter confirming it is not a loan.
- FHSA and RRSP HBP funds countYou can use First Home Savings Account funds and RRSP Home Buyers' Plan withdrawals toward your down payment - see the first-time programs section below.
- Proof of down payment is carefully checkedLenders require 90 days of savings history for the full amount. Start building the paper trail now.
Get pre-approved - before you make a single offer
Pre-approval is not just paperwork. It's a rate hold, a spending limit, and a signal to sellers that you are a serious buyer. Sellers and realtors take you more seriously if you have a pre-approval in hand. And the value of the rate hold is big - protecting you against rising rates while you shop for a home.
- A rate hold locks in today's rate for 90–120 days - if rates rise before you close, you're protected
- Your maximum purchase price is confirmed before you fall in love with something out of range
- The pre-approval process gets you properly planning and budgeting ahead of time
- Frank's licensed advisors work with you to maximize your purchasing power
Your offer is accepted - finalize mortgage approval and close
Once your offer is accepted, Frank's licensed advisors convert your pre-approval into a firm mortgage commitment with the lender. You will be required to provide some additonal information to get thigs finalized.
Documents you'll need
- Letter of employment confirming position, start date, and salary
- Recent pay stub (last 30 days)
- T4 slips or NOA from last 2 years
- Last 90 days of bank statements (down payment source)
- Gift letter (if any portion of down payment is gifted)
- Government-issued photo ID (driver's license or passport)
- Self-employed: last 2 years of NOA + T1 General + financial statements
The stress test: All federally regulated lenders must qualify you at your contract rate + 2% (or 5.25%, whichever is higher). If your pre-approval rate is 4.5%, you must prove you can afford payments at 6.5%. This reduces your maximum purchase price compared to what you could qualify for at the actual rate. Factor this in early.
Meanwhile, budget carefully for closing costs. They catch many buyers off guard because they come on top of the down payment.
- Legal fees and disbursementsRoughly $1,500–$2,500 for a real estate lawyer to handle title registration, mortgage setup, and closing adjustments.
- Land transfer taxThe largest closing cost for most buyers - varies by province and purchase price. Use the calculator below for a precise estimate. First-time buyers in Ontario, BC and PEI can receive rebates.
- Title insuranceTypically $200–$400 for a lender's policy; a homeowner's policy is optional but recommended at an additional $200–$300.
- Home inspection$400–$600 for a qualified inspector - highly recommended before removing the home inspection condition.
- AdjustmentsProperty taxes, utility prepayments, and condo fees that the seller has paid in advance are prorated at closing.
- CMHC premiumIf your down payment is under 20%, the mortgage default insurance premium is added to your mortgage balance - not paid upfront - but there's a provincial sales tax on the premium paid at closing (e.g., 8% in Ontario).
Take possession - here's what actually happens on closing day
Closing day tends to be less dramatic than buyers expect - most of the work happens in the background between your lawyer and the lender. But there are things you need to action before the keys are in your hand.
- Sign mortgage documents with your lawyer 1–2 days before the closing date; the lender advances funds on the actual closing date
- Your lawyer registers the title in your name and confirms that all conditions of the sale have been met
- The remaining balance of your down payment (minus the deposit already paid) plus closing costs are due to your lawyer by certified cheque or wire transfer
- Your first mortgage payment is typically within 30 days after closing - confirm the exact date with your lender
Before you pick up the keys
- Home insurance policy in place and confirmed with your lawyer and lender
- Closing cost funds transferred to your lawyer's trust account
- Final walkthrough of the property completed
- All mortgage documents signed with the lawyer
- Utility transfer and address change notifications scheduled
- Plan for the move-in
Frank's licensed advisors handle the mortgage side so you can focus on the home
Between affordability assessment and closing day, there are dozens of moving parts on the mortgage side. Frank's licensed advisors manage all of it on your behalf - for free (except for mortgages with private lenders), because the lender pays Frank, not you.
- 1. We arrange your pre-approval. We find the best rate and you get peace of mind that an increase in rates can't hurt you.
- 2. We explain the trade-offs, not just the rate. Prepayment privileges, penalty calculation methods, portability, and product restrictions all affect the real cost of a mortgage. Frank's licensed advisors walk you through what matters for your situation.
- 3. We convert your pre-approval to a firm commitment when your offer is accepted. Most buyers don't realize how much coordination happens here - appraisal, document collection, lender conditions. Frank's licensed advisors handle the back-and-forth.
- 4. We coordinate with your lawyer and the lender through to closing. Funding documents, title insurance requirements, and lender conditions are managed so nothing falls through the cracks in the final stretch.
- 5. We're available after closing too. When your renewal comes up, Frank's licensed advisors are already familiar with your file - you're not starting from scratch.
This is Frank's free mortgage service. The lender pays Frank - you pay nothing.
First-time buyer? You have access to $101,500+ in programs plus land transfer tax rebates.
FHSA (up to $40K tax-free), RRSP Home Buyers' Plan (up to $60K), First-Time Home Buyers' Tax Credit (~$1,500), and land transfer tax rebates are available in some jurisdictions. See full details, eligibility rules, and how to stack them -
See all first-time buyer programs →Current purchase mortgage rates
Rates shown are available today from lenders Frank Mortgage works with. Pre-approval rates may differ based on your qualifying profile - use these as your benchmark when evaluating what's possible.
Frequently asked questions about buying a home
What is the mortgage stress test and how does it work?
The mortgage stress test is a federal rule requiring all lenders regulated by OSFI or using CMHC mortgage defalt insurance to qualify buyers at the higher of their contract rate + 2%, or the Bank of Canada's minimum qualifying rate (currently 5.25%).
For example, if you are offered a rate of 4.5%, you must demonstrate you can afford mortgage payments calculated at 6.5%. This reduces your maximum purchase price compared to what the actual rate would allow - typically by 15–20%.
The stress test applies to all new mortgages at federally regulated lenders (banks and most credit unions) or for any lender using CMHC mortgage default insurance.
What is the minimum down payment to buy a home in Canada?
Canada's minimum down payment rules are tiered by purchase price:
- Under $500,000: 5% of the full purchase price
- $500,000–$999,999: 5% on the first $500,000 + 10% on the remaining amount
- $1,000,000–$1,499,999: Blended minimum; insured mortgages allowed up to $1.5M (rule expanded December 2024)
- $1,500,000 and above: Minimum 20% — conventional mortgage only, no CMHC insurance available
For a $700,000 home, the minimum down payment is $45,000: 5% × $500,000 ($25,000) + 10% × $200,000 ($20,000).
What's the difference between an insured and a conventional mortgage?
An insured mortgage is one where the buyer puts down less than 20% of the purchase price. CMHC (or Sagen or Canada Guaranty) charges a default insurance premium, ranging from 2.8% to 4% of the mortgage amount, which is added to the mortgage balance. The lender is protected against default, which is why insured borrowers often receive lower interest rates.
A conventional mortgage requires 20% or more down. No default insurance is required, meaning the premium doesn't inflate your balance. However, most lenders apply a small rate premium to conventional mortgages to price in the uninsured default risk.
As a general rule: if you have 20%+ and your purchase is under $1.5M, conventional is almost always the better long-term structure. If you're below 20%, CMHC insurance is mandatory - the premium is a cost of entry, not a choice.
How long does mortgage pre-approval take?
With a broker, a full pre-approval typically takes 1–3 business days. Document collection (T4s, NOA, bank statements, employment letter) is usually the longest part.
A pre-approval includes a rate hold for 90–120 days. If rates rise, your held rate is protected. If rates fall, you still get the lower rate at closing - it is a win-win for you. Confirm the rate hold policy with your specific lender or broker.
Important distinction: a pre-approval is not a final approval. Once you have an accepted offer, the full mortgage underwriting takes place. The property itself must also be accepted by the lender - appraisal, title search, and strata document review (for condos) happen after your offer is accepted. The final firm commitment typically takes 2–5 business days post-offer-acceptance.
Can I get a rate hold before making an offer?
Yes, this is exactly what a pre-approval provides. A mortgage pre-approval includes a rate hold that protects your rate for 90–120 days while you search for a property. Don't underestimate the value of this rate protection - rates can increase suddenly and cost you money if you are not protected with a rate hold.
Rate holds are free and do not obligate you to proceed with any lender or any purchase. If rates rise before you find a property and close, your held rate is protected. If rates fall, you typically receive the lower rate at closing.
Related guides
A Beginner's Guide to the Mortgage Process
The full mortgage process explained from pre-approval to close - what happens, in what order, and what to expect.
Down Payment Requirements for Mortgages in Canada
Everything you need to know about minimum down payments, acceptable sources, and the CMHC insurance thresholds.
First Home Savings Account (FHSA)
How to set up an FHSA, contribution rules, qualifying withdrawal conditions, and how to combine it with the RRSP HBP.
First Time Home Buyer Incentives in Canada
A complete breakdown of every federal and provincial incentive available to first-time buyers — and which ones stack.
How 30-Year Amortizations Help First-Time Buyers Enter the Market
How the 30-year amortization rule change affects monthly payments, total interest cost, and qualifying power.
GDS and TDS Ratios Explained
The two debt-service ratios lenders use to decide how much you can borrow - and how to calculate yours before applying.
Ready to get pre-approved and start shopping with confidence?
Frank compares purchase rates from 20+ lenders and guides you from affordability check to closing day. No cost, no obligation.