Home Buying Tips for Canadians

Your 2025 Guide to Buying a Home with Confidence

Buying a home in Canada in 2025 can feel overwhelming - interest rates are down but everyone wishes they were lower, market conditions and affordability can be daunting depending on where you are located, rules around mortgage down payments and qualification continue to change and can be confusing. How can you get confident in your home buying plan? This guide breaks everything down into simple, practical steps to help you approach the home-buying process with clarity.
Whether you are a first-time homebuyer in Canada or returning to the market after a few years, these tips will help you make smart, confident decisions.

1. Understand Canada’s Down Payment Requirements
and Closing Costs

Saving for a down payment is a key first step. Down payment rules for homebuyers in Canada depend on the purchase price. The minimum down payment is::

• 5% of the purchase price for homes under $500,000.
• 5% on the first $500,000 + 10% on the remainder for homes between $500,000 and $1,500,000.
• 20% minimum for homes valued over $1.5M.
• A 20% down payment is also required for all investor/rental property purchases.

You will also need to budget for:

• Land transfer tax (varies by province/municipality)
• Legal fees
• Home inspection
• Title insurance
• Appraisal
• Adjustments (property tax, utilities, condo fees)

Buyers often underestimate these upfront costs so talk to a good mortgage broker and plan early to comfortably manage these requirements.

2. Make Sure Your Credit Score and Income Match Your Expectations

To qualify for the most affordable mortgage you will need to have a good credit score. Lenders offering the lowest rates want to see credit scores above 680. If your score is lower than that you can still get a mortgage, but it may come with a higher rate and some upfront fees. 

You also need to know that you have enough income to qualify for the mortgage you will need for your desired home purchase. The mortgage stress test makes it more challenging but speak with a mortgage broker who can run some numbers for you or use an online mortgage affordability calculator to test what you can afford, given your income. Mortgage lenders will also want to see some stability in your income, especially if you are self-employed.

3. Get a Mortgage Pre-Approval

If you want to shop for a new home with confidence, you need to know exactly what you can afford. A mortgage pre-approval is not only about finding out what mortgage rate a lender may offer you, it is also an indication from a lender of how much mortgage you can qualify for.

Why mortgage pre-approval matters:

• Gives you a realistic price range by letting you know the size of mortgage you can get.
• Locks in a mortgage rate hold for 90 to 120 days, protecting you from rate increases while you shop for a home.
• Helps your offer stand out in competitive markets by showing sellers and realtors that you can qualify for financing.
• Prevents surprises when it’s time to finalize your mortgage.

A good mortgage broker can compare banks, credit unions, monoline lenders, and private lenders to help you understand your options and secure the best available rate and mortgage structure.

4. Use Canada’s Home-Buyer Incentives to Reduce Your Costs

The federal government offers several programs that can significantly reduce the cost of buying a home, especially if you are a first-time homebuyer.

Key programs Canadian homebuyers should know:

• First Home Savings Account (FHSA) - these are a great savings vehicle for first-time homebuyers that allow tax-deductible contributions and tax-free withdrawals for purchasing your first home.
• Home Buyers’ Plan (HBP) - allows you to withdraw up to $60,000 from your RRSP tax-free for your down payment. 
• First-Time Home Buyers’ Tax Credit (HBTC) - helps offset closing costs.
• GST/HST rebates for new-build properties (where applicable).

Using a combination of these programs can materially reduce out-of-pocket costs.

5. Build Your Home-Buying Team Early

Buying a home isn’t something you do alone. The right team protects you from costly mistakes and helps you make informed decisions.

Your home-buying team should include:

• Mortgage Broker: for finding the best mortgage rates and mortgage products and advice on how to get approved.
• Realtor: for market insight, help finding properties and advice on your offer strategy.
• Real Estate Lawyer: for title checks, contract reviews, and closing.

This team is especially important if you are entering a competitive housing market or exploring alternative mortgage options.

6. Separate Your “Must-Haves” From “Nice-to-Haves”

One of the biggest mistakes homebuyers make is shopping emotionally. This can lead you to over-commit to something you may not be able to afford or may have second thoughts about after the deal is done. To stay focused create two lists:

• Must-haves: For instance, the number of bedrooms, commute time, budget, neighborhood type, proximity to schools and parks.
• Nice-to-haves: For instance, upgraded kitchens, large yard, extra parking, finished basement.

This kind or organization of your priorities can help you stay grounded, especially in fast-moving and high-demand markets like Toronto, Vancouver, Ottawa, or Calgary.

Pro tip: It also pays to plan ahead. Your needs may change in 5–10 years, so think long-term.

7. Prepare for the Unexpected (A Smart Buyer’s Safety Net)

Homeownership involves ongoing costs that buyers often overlook. Prepare your budget for:

• Repairs and maintenance
• Property taxes
• Utility increases
• Furniture and other interior finishings
• Interest-rate changes (especially with variable mortgages)

A simple rule of thumb that may help would be to set aside 1% to 3% of the home’s value annually for maintenance.

This protects your budget and reduces financial stress.

8. Don’t Try to "Time the Market". 

The Canadian housing market is dynamic. Prices shift, competitive dynamics change, interest rates fluctuate, and trends vary by region.

The truth is that perfect timing matters less than being financially prepared.

Some simple basics that can let you know when you are ready to buy include:

• You have stable income
• You have saved for a down payment and closing costs
• Your monthly budget works comfortably
• You have been pre-approved
• You are buying a home that fits your long-term needs

When those pieces are in place, market timing becomes less important. Affordability and your personal financial stability should be the priority.

Final Thoughts: Buy Smart, Stay Informed, and Plan Ahead

Buying a home in Canada is one of the biggest financial decisions most Canadians will ever make. But with the right preparation and the right guidance, it becomes a clear, confident step toward the future you want. Engage with your expert team early. You don’t need to be in a rush, but you do need to be informed. 

At Frank Mortgage, we are here to help you:

• Understand your mortgage options
• Compare rates across lenders
• Build a financing plan that fits your goals
• Get pre-approved quickly
• Navigate the home-buying process with clarity

If you are thinking about buying soon, we can walk you through every step, from pre-approval to the day you get your keys. Contact us at www.frankmortgage.com or 1-888-850-1337. We help new homebuyers every day and would love to also help you.