Buying your first home is a huge life moment, exciting and honestly a little nerve wracking. For many people it’s the biggest financial decision they’ve ever made. The difference between stressful and confident comes down to preparation. Here’s how to know you’re actually ready.
Assess your credit profile
Your credit profile is the key to getting approved for a mortgage, and to landing a good rate.
- Check your credit score. Most lenders like to see at least 680 for the best mortgage deals. Don’t know yours? Get it free at Credit Karma or Borrowell.
- Tackle high interest debt first. Paying down credit cards and personal loans improves your debt to income ratio and makes you a more attractive borrower.
- Build history if you’re starting from scratch. A secured credit card or a small credit builder loan works. Some lenders also count alternative history, like rent payments.
- Review your credit report for errors. Get a free report from Equifax or TransUnion. Fixing a mistake can give your score a quick boost.
Budget beyond the down payment
The down payment and the monthly mortgage are just the headline numbers. The real budget includes:
- Closing costs — typically 1.5% to 4% of the purchase price: legal fees, inspections, land transfer taxes.
- Maintenance and repairs — from leaky faucets to a new roof, ownership comes with surprises.
- Utilities, property taxes, and insurance — ongoing costs that need a permanent place in your budget.
Rule of thumb: keep total housing costs under 35% of your gross monthly income. Earning $5,000 a month? Aim to keep mortgage, utilities, and taxes under $1,750.
Take advantage of first time buyer incentives
Canada has a stack of programs built to make your first purchase easier, including a big new one:
- First Time Home Buyers’ GST Rebate, new in 2026. Now law as of March 2026: no GST (or the federal part of HST) on a newly built home up to $1 million, with partial relief between $1 million and $1.5 million. That’s worth up to $50,000, for purchase agreements signed from March 20, 2025 through 2030.
- Home Buyers’ Plan (HBP). Withdraw up to $60,000 from your RRSP tax free for your down payment (repayable over 15 years).
- First Home Savings Account (FHSA). Contribute up to $8,000 a year ($40,000 lifetime), tax deductible going in and tax free coming out for your first home.
- First Time Home Buyers’ Tax Credit. Claim the $10,000 amount for a credit worth up to $1,500 against closing costs.
- Land transfer tax rebates. Ontario: up to $4,000. Toronto: up to $4,475 more. BC: full or partial exemption depending on price. Check your province, as many have their own.
Know the process
- 1. Get preapproved. This tells you (and sellers) what you can actually afford.
- 2. Start house hunting. Work with an agent who understands your needs and your ceiling.
- 3. Make an offer. Your agent helps you negotiate terms when you find the one.
- 4. Get an inspection. Know exactly what you’re buying. No surprises.
- 5. Close the deal. Paperwork, closing costs, keys.
Know your number before you fall in love with a listing
The honest thing to do before any of this: know where you stand today. Your real monthly surplus, your debt load, your leaks. That’s what determines the mortgage you can carry comfortably, not the maximum a lender will approve. Finally reads your bank statements and gives you that picture in minutes, with a clear set of actions to get ready to buy sooner.