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Summary: The 11 tips that help first-time buyers in Ontario are: start saving early, clean up your finances and credit, hire a reputable agent, research first-time buyer programs, get a mortgage pre-approval, set and stick to a budget, separate your needs from your wants, make a competitive offer, complete a home inspection, avoid new debt before closing, and prepare for closing day. Plan for a minimum 5% down payment plus closing costs of roughly 1.5 to 4% of the price.
Entering the housing market can feel daunting for first-time buyers. To help you navigate it, here are 11 tips to keep in mind when buying a home in Ontario.
How early should you start saving?
As early as possible, because a purchase involves costs at several stages. The main ones to plan for are:
The down payment. In Ontario, a minimum of 5% of the purchase price is required. If your down payment is under 20%, you will also need mortgage loan insurance, and homes priced above $500,000 carry additional down-payment conditions. See the federal guide on how much you need for a down payment.
Closing costs. Several fees come due at closing, usually 1.5% to 4% of the purchase price, including land transfer tax, real estate lawyer fees, and registration and insurance fees. Our guide to the costs involved in a real estate transaction breaks these down.
Moving expenses. Truck rentals, furnishings, and property maintenance all vary with your needs.
How do you clean up your financial situation?
Getting approved for a mortgage can be a challenge with Ontario's high prices. Lenders weigh your down payment, your income, and your credit score. Credit score matters a lot, because it affects both approval and your interest rate: a good score signals low default risk. In general, 650 and above is considered good and 750 and above excellent. Before applying, do what you can to get your score in the best shape possible.
How do you choose a real estate agent?
A good agent guides you through the process with your interests at heart and knows the current market. It is worth interviewing at least three agents about their market knowledge and how well they understand your needs. Remember to discuss commission: the standard is often quoted as 5% of the purchase price plus HST, though in practice it ranges from 3.5% to 5%. That total is split between the buyer's and seller's agents, with the buyer's portion typically around 2.5%.
What first-time buyer programs should you research?
Several programs help Ontario buyers enter the market, from registered savings plans to tax credits and rebates, and they can meaningfully affect your budget. The current ones worth researching:
Program | What it offers |
Lets you withdraw from your RRSP toward a first home | |
Refund of up to $4,000 of provincial land transfer tax for first-time buyers | |
A federal income-tax credit for first-time buyers |
For a fuller picture, see our guide to first-time home buyer incentives in Ontario, which covers the programs currently available.
Why get a mortgage pre-approval?
A pre-approval is a written offer from a lender stating the amount and terms they are willing to approve, sometimes called a pre-qualification or preauthorization. It shows sellers and agents you are a serious buyer, which can help when negotiating. When getting pre-approved, ask your broker or lender:
How long will they guarantee the pre-approved rate?
Will you automatically get the lower rate if interest rates drop while you are pre-approved?
Can the pre-approval be extended if needed?
How do you stick to your budget?
Set a budget and hold to it. You may feel pressure to exceed it, whether from a competing offer, a lender approving more than you are comfortable borrowing, or unexpected costs after an inspection. To avoid financial stress later, decide your ceiling in advance and only operate within your means.
How do you separate needs from wants?
Buying a home is personal, so weigh your lifestyle against what each property offers. Categorize your needs versus your wants, including minimum square footage, number of bedrooms and bathrooms, and whether you need a garage or workspace. Only you can define your living requirements, so make sure the property can actually accommodate them.
How do you make a competitive offer?
Once you find a listing you are serious about, you submit an offer. Depending on the market and the property, you may need to offer above asking, though you can sometimes negotiate, especially if the home has sat on the market longer than comparable listings. A few ways to make an offer stand out:
Include a mortgage pre-approval letter.
Include conditions that let you walk away if needed.
Write a personalized note to the seller explaining why you love the home.
Should you complete a home inspection?
Yes. It is wise to make your purchase conditional on the home passing a professional home inspection. Inspectors look for potential problems so you can decide with full information. Confirm what the inspection covers, since some do not include faults like radon or pests, and try to attend so you can ask questions on-site. If the inspection reveals unknown issues, you may be able to use that as leverage to negotiate a lower price.
Why should you avoid new debt before closing?
Do not take on more debt or change your income before closing day. Lenders re-check your finances, including credit history and employment, right up to closing. Switching jobs or taking out a car loan now could jeopardize your mortgage approval, so keep your financial picture stable.
How do you get ready for closing day?
After the purchase agreement is signed, your lender schedules an appraisal to confirm the property's market value. If the appraisal comes in low, you will need to negotiate that with the seller or cover the difference yourself; if it is at or above the price, you are good to go. From there you show up on closing day, sign, pay what is owed, and get your keys. A real estate lawyer handles the legal side of that final step.
Frequently asked questions
What is the minimum down payment in Ontario?
The minimum is 5% of the purchase price. If your down payment is under 20%, you must also buy mortgage loan insurance, and homes priced above $500,000 carry additional down-payment requirements on the portion above that amount.
What credit score do you need to buy a home?
There is no single cutoff, but in general a score of 650 or above is considered good and 750 or above excellent. A higher score improves both your odds of approval and the interest rate a lender offers.
What programs help first-time home buyers in Ontario?
Current programs include the Home Buyers' Plan (an RRSP withdrawal), the Ontario land transfer tax refund of up to $4,000, and the federal Home Buyers' Amount tax credit. The First Home Savings Account is another tool worth researching; confirm current eligibility before relying on any program.
What are closing costs for a first-time buyer?
Closing costs typically run 1.5% to 4% of the purchase price and include land transfer tax, real estate lawyer fees, and registration and insurance fees. They are separate from your down payment, so budget for both.
Should a first-time buyer get a home inspection?
It is strongly recommended. Making your offer conditional on a professional inspection lets you uncover problems before you commit, and any issues found can become leverage to renegotiate the price.
About the author
Liam Seston is a content writer at Ownright. He writes about the Ontario home-buying process to help first-time buyers understand what to expect at each stage, from saving for a down payment to closing day.
At Ownright, we focus on Ontario real estate law and simplify the legal side of your closing through a clear, step-by-step process. You can start your closing online or get in touch with any questions.
Important note: This article is for general information only and is not legal, tax, or financial advice. Programs, rates, and figures change over time, so confirm current details before relying on them. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate professional advice.
