April 6th, 2025 | Uncategorized

Guide For First-Time Home Buyers in Ottawa

Buying your first home is a goal to look forward to, and the City of Ottawa is one of the best places in Canada to attain it. Just think of it: extraordinary shopping, dining, and entertainment, incredible scenic beauty, and superb opportunities for education and employment.

Did we mention that all of these benefits come at a much lower cost of living than you’d ever experience in the GTA? If you’re sold on the idea of buying your first home right here in Ottawa, here is a comprehensive guide to get you started!

Where Do You Start?

You, a homeowner? The thought can fill you with a flood of emotions ranging from sheer terror to joy and elation. It’s a big decision, and your life is about to undergo a dramatic transformation. It’s all positive for the most part, but change is change, and it can be frightening no matter what.

The first step might just be to take a deep breath. You’re ready for this, and there are plenty of resources and support systems to guide you all through your journey. If you ever start to feel anxious, just remember all of the benefits that await you.

Soon, you’ll have a place that is truly your own, where you can take the time to decorate the way you want it – and you never have to ask a landlord for permission. Best of all, you’ll have no more rent payments. You’ll have a monthly mortgage, which means you can look forward to the day when your home is paid in full.

Do you want to stay informed with what is happening in the world of Ottawa real estate? Get the latest news and early access to listings by subscribing to our newsletter right here.

Get in Touch With a REALTOR®

Whether the purchase of your first house is six months or a year away, the time to get in touch with an experienced Ottawa real estate agent is now. You don’t have to try to navigate a constantly changing market yourself. Instead, you’ll have expert guidance that allows you to make careful and informed decisions at every stage in the process.

With the right level of support, you can rest assured that you will find a home suitable for your needs at a fair price and favourable terms. You have a one-stop resource for any and all of your questions, as well as a caring professional who will represent your interests in any market.

Looking for more advice on finding the right representation for you? The posts below might help:

Financing for Your First Home

A certain amount of financial literacy will go a long way to finding and securing a home you love that you can also comfortably afford. You don’t need an accounting degree, but understanding how financing works will give you a valuable advantage as a first-time home buyer.

With that in mind, here is real estate financing 101:

Pre-Approval Versus Pre-Qualification

First, obtain a mortgage pre-qualification or pre-approval. These two processes are similar. What you choose depends on how firm you are on your decision to buy your first house.

If you’re simply testing the waters, a pre-qualification will give you a rough idea of how much funding a lender may offer you. You can apply in minutes online and get an answer just as fast. However, that amount is just an estimate and could change once you actually begin searching for homes.

If you’re determined to buy in the next few months, a pre-approval is a much more accurate estimate. You’ll submit a mortgage application and the lender will verify your income and credit history. The lender will then provide you with a Certificate of Pre-Approval. It’s much more in-depth than a pre-qualification, but it’s important to remember that this is also not a sure thing.

If your employment status or credit score changes, the lender may offer you less or rescind the offer of financing. The bottom line is to avoid changing positions or making any large purchases on credit unless absolutely necessary.

Variable or Fixed Mortgage

You’ll have even more decisions when it comes time to finalize your mortgage. Should you choose a variable or fixed term, and what exactly is the difference?

A variable mortgage is tied to the prime rate as set by the Bank of Canada. When rates are low, more of your payment goes towards your principle, which can mean either a lower payment or paying down your loan faster. When rates increase, your lender may apply more of your payment to interest than the principle.

Alternatively, your payments could fluctuate month by month. Some buyers, especially first-time buyers, don’t like the uncertainty of a variable mortgage. On a positive note, interest rates are often lower, but not always. The penalties for ending your term early are also less severe.

A fixed-term mortgage means your interest rate is locked in for the duration of your term. Fixed mortgages are also tied to Canadian bond yields rather than the Bank of Canada rate, so they can be more stable.

You don’t get the advantage of paying less when rates drop. On the other hand, you also have the security of knowing how much you will owe each month. If rates are at a historic low when you apply for a mortgage, it might be a good idea to choose a fixed term. Keep in mind that the penalties are higher should you decide to end your contract early.

Down Payment and Deposit

Your mortgage will cover the bulk of your home purchase. However, you do need to have access to some funding of your own to buy a house. The amount you pay yourself is called the down payment. In Canada, the requirements are as follows:

5% on the first $500,000 of the purchase price
10% on any amount between $500,000 and $1.5 million
20% on all amounts over $1.5 million

The deposit is the portion of your down payment that you pay within 24 hours of a seller accepting your offer. The rules for deposits are not set, but it’s usually around 3- 5% of the total purchase price of the house.

To see how this works in the real world, let’s imagine you’re buying a house for $700,000. The total down payment would work out to $45,000 ($25,000 on the first $500,000 plus $20,000 on the remaining $200,000).

To make your offer appealing to the seller, you’ve agreed to a 3% deposit. That means you pay the first $21,000 (3% of $700,000) within 24 hours. The remaining $24,000 of your down payment is paid upon the closing date before you take possession of your home.

When buying real estate, it’s also important to keep in mind that you will have closing costs. These include land transfer taxes, legal fees, appraisal fees, inspection costs, and more. All in all, you’ll want to ensure you set aside from 3- 5% to safely cover all of these added expenses.

We’ve barely scratched the surface on all the great reasons to buy your first home in Ottawa! Learn more in the posts below:

Resources for First-Time Buyers

Between the purchase price, down payment, and closing costs, buying a house can be very expensive. First-time buyers without a lot of equity can find it particularly challenging. Fortunately, there are some government programs designed to make your first purchase more accessible.

First Home Savings Account: You can save up to $8,000 per year to a 40,000 lifetime maximum toward your purchase. Between your contributions and any dividends they earn, this can add up significantly over the years. The sooner you start, the more your investment can grow. Unlike with the Home Buyer’s Plan, there is nothing to repay afterward. You simply close the account.

Home Buyer’s Plan: If you’ve already started saving toward retirement, you can pull up to $60,000 out of a tax-sheltered account to buy your first home. These funds must then be repaid to your RRSP within 15 years to ensure you don’t pay a tax penalty.

Land Transfer Tax Rebate: These are one of your more substantial closing costs. Like your down payment, the amount increases based on the purchase price of the house. A provincial land transfer tax rebate will save you up to $4,000 as a first-time buyer.

First-Time Home Buyer Tax Credit: When tax time rolls around, you can claim a $10,000 credit in the year you purchase your first home. This results in a savings of $1,500.

Get Up to Date With the Current Market

Many first-time buyers ask when it’s the right time to get into the market. There is no one-size-fits-all answer, but generally, you want to base your decision on your own goals and timeline rather than any outside factors.

If you wait for conditions to be perfect, you might find yourself sitting on that fence forever! That said, it’s always advantageous to understand what is happening in the market when you are planning to buy. Being armed with knowledge and up-to-date data will help you uncover any negotiating power you have.

Seller’s Markets

A seller’s market means there are more people looking for houses than there are houses for sale. Increased competition can lead to multiple offers, which in turn can cause prices to go up. It’s not the best situation for a first-time buyer to be in. However, it also doesn’t necessarily mean that you should put your plans on the back burner.

Your real estate agent can help you craft an offer that makes sellers take notice. In addition, a local expert might be able to point you toward an up-and-coming neighbourhood with lower prices and greater availability.

Buyer’s Markets

A buyer’s market means conditions favour you. There are many people trying to sell a home, and not enough people searching for them. If you play your cards right, you can capitalize on this opportunity even more.

Balanced Markets

A balanced market means conditions are more or less equal between buyers and sellers. In this in-between state, you should be willing to negotiate if necessary while still being optimistic about your potential outcome.

The individual scenario will determine who has the advantage. When a buyer falls in love with a house and wants it at any cost, the situation favours the seller. If you have multiple homes to choose from with no competition, then you are in an ideal position.

Map Out Your Plan

With your financing in order and a solid understanding of today’s market, you can now create a buying plan that works for you. At any given time, there could be multiple houses to choose from that all seem to meet your needs. Having a clear but flexible wish list in place will help you focus on what matters most without allowing your emotions to take control.

Think of what features you must have in your home and will not compromise on, such as the number of bedrooms and bathrooms or whether or not public transit is available. Next, think of what you’d like to have but are willing to compromise on for the right price and terms. Lastly, think of what your deal breakers are.

When you have a clear picture of what you want (and what you don’t), you can narrow down your options to a few favourites. By only scheduling showings for your top choices, you save time and can focus your efforts on the home that checks off most of your boxes.

Refine Your Offer

It’s a good thing you performed all that market research in advance because it will really come into play when it’s time to start crafting your offers. One of your first decisions will be whether to submit an unconditional or conditional offer.

For your protection, we always recommend a home inspection. You may also want to add a condition of financing to be safe. Just keep in mind that the more clauses your offer contains, the less appeal it has to sellers. If it’s the only offer, you stand a chance to get the home you want. When you’re facing competition, too many contingencies can cause the seller to reject your offer.

If the market is busy, you may need to place an unconditional offer to have a chance. This doesn’t mean throwing caution to the wind. You can still protect your interests while remaining competitive in a busy market. For example, instead of including a condition of home inspection, arrange an inspection of your own before submitting your offer.

Your mortgage pre-approval is actually a potent negotiating tool that proves to the homeowner that you qualify for financing, which increases the odds of a seamless transaction. When all things are equal, this step can make your offer more appealing than someone else who has yet to apply.

Some buyers will also offer a higher deposit than what is required. If you have the cash readily available, this can be a show of good faith that you intend to follow through on your purchase. Even better, you don’t end up paying more for the house!

Do you want even more resources for a successful home purchase? Check out the related reading below:

Prepare to Close

Once a seller accepts your offer, it’s time to begin the closing process. Your real estate lawyer will take care of most of the details, such as performing a title search and ensuring all of the real estate documents are in order.

Your job is to begin packing up your belongings and getting ready to move into your new home. It’s time to start recruiting friends and family to help, or better yet, connect with a moving service to make your relocation as effortless and stress-free as possible.

You’ll also want to begin changing your address on correspondence and arranging for utility setups. The list of tasks can seem endless, but your real estate agent should still be able to help you stay on track.

Once you’re all settled, you’ll quickly find that there’s nothing quite like owning a home of your own! From deciding what colour to paint and picking out new furniture, your new adventure in homeownership has just begun.

Personalized, expert guidance is your ultimate resource for buying your first house. Our Ottawa real estate agents will walk you step-by-step through the entire process. Reach out to us anytime at 613.829.7484 or email mail@chellteam.com to learn more about our services.