More than ever, those from the younger generations are starting to look into how to buy a home in Ontario. The benefits of owning a place of your own are too great to be denied even with all of the challenges in the market today.

Owning real estate means greater financial security and building equity over time until one day you own a valuable asset mortgage free. Even better, there’s a sense of pride and accomplishment after achieving this goal. How do you make it happen? In this post, we’ll give you an overview on the steps to buying your first house in Canada.

If you’re ready to act and are looking for even more detailed information, our Home Buying Guide can help! Download your copy for free.

What Do I Need to Buy a House in Ontario?

What are the requirements for buying a house in Canada? First and foremost, you’ll need to ensure you are legally qualified to commit to a transaction. Real estate purchases are open to Canadian citizens and permanent residents over the age of 18.

In 2023, the federal government enacted the Prohibition on the Purchase of Residential Property by Non-Canadians Act, also known as the foreign buyer’s ban. The idea is to ensure enough housing supply for citizens and residents, but there are exceptions.

Temporary residents with work permits could potentially buy a house if they live here at least 183 days of the year and have not purchased more than one property. International students can also qualify, again if they don’t already own a home and the purchase price does not exceed $500,000 per year.

In general, if you legally live in Canada and plan to stay, you likely qualify to buy property here.

How to Prepare to Buy a House

There are a few points to consider when buying a house. Clarifying your goals for both the short and long term creates a solid foundation. For young buyers, it’s important to remember that your first home doesn’t have to be your forever home.

For now, you might need to consider something that you can comfortably afford, even if it doesn’t meet your more stringent criteria. Once you begin building your equity, you’ll have the option to move up to a home more aligned with your dreams.

Now let’s talk about how to budget for your real estate purchase. The down payment is calculated based on a tiered percentage of the total price. Here’s how the breakdown works:

• 5% on the first $500,000
• 10% between $500,000 and $1.5 million
• 20% over and above $1.5 million

Next, you’ll want to account for your monthly carrying costs. Our home buyer’s calculator can help you determine a realistic number. Be sure to cushion this budget to allow for any repairs and maintenance.

In addition to your down payment and monthly mortgage, you’ll also have some closing costs. These include land transfer taxes, legal fees, utility set ups, home inspection and appraisal fees, and moving expenses.

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Your vision of your new home can keep you motivated through the planning and budgeting steps. Just think of all you have to look forward to when living in Ottawa:

• Is Ottawa Boring? No, and Here’s Why!
• Ottawa: More Than Meets the Eye
• Why Young Home Buyers Love Ottawa

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Understand First Time Buyer Resources

There’s no doubt that buying a home is an expensive endeavour. However, there are programs designed to help you take those first steps to buying a house. Here’s a quick overview of some of the federal and provincial incentives available:

• First Home Savings Account: You can contribute up to $8,000 per year to a maximum of $40,000 to put toward your down payment.
• Home Buyers’ Plan: If you have an existing registered savings account, you can withdraw up to $60,000 tax free, but you must repay those funds within 15 years.
• Land Transfer Tax Rebate: This instant rebate for first-time home buyers saves you up to $4,000 on your closing costs.

With the preliminary steps out of the way, the home buying process becomes far more logical and straightforward.

Select Your Real Estate Agent

In Ontario, working with an agent isn’t required to buy a house, but it is highly recommended, particularly as a first-time buyer.

Once you sign a Buyer Representation Agreement, both the real estate team and their brokerage are legally compelled to act in your best interest. You will have a knowledgeable expert to guide you through each step, advocate for you, and negotiate the best possible terms of the sale.

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Helping first-time buyers find and purchase a home is one of the things we love most about our jobs. That’s why we have even more resources to help make your dream come true:

• A Guide For First-Time Home Buyers in Ottawa
• What Are the Top Misconceptions for First-Time Home Buyers?
• Strategies to Help First-Time Buyers Enter the Real Estate Market

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Get Pre-Approved

Obtaining a mortgage pre-approval before looking at houses can be a powerful negotiation tool. Taking this step reassures sellers that you qualify for sufficient financing.

Simply visit a mortgage broker or your preferred bank, and they will walk you through everything you need to know. If you don’t have these connections, your real estate agent can make a referral. Alternatively, you can go through the process online. The lender will ask about your assets, income, and debts, and you’ll fill out a mortgage application.

Once you have your Certificate of Pre-Approval, it’s critical that you do not make any large purchases on credit unless absolutely necessary. The approval amount is based on your current financial situation. If anything changes, it could alter your ability to finalize your loan.

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Obtaining financing is one of the biggest challenges for first-time home buyers. Never fear, however; we have even more creative solutions that could help:

• Can You Buy a Home with a Co-Signer?
• Should I Gift My Child a Down Payment For Their Home?
• Multigenerational Living in Ottawa: When Your Parents Move In

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Breaking Down the Home Buying Process in Ontario

1 – Start your home search: Now, it’s time for the most exciting part of this entire process: looking at potential homes! Your real estate agent will zero in on listings that are suitable for your needs and budget. They’ll also help you determine what to look for and what to avoid.

2 – Making an offer on a house: Imagine you’ve found the home of your dreams. It’s time to place your offer to purchase. Your real estate agent will help you on how to make an offer on a house, and strike the right balance between appealing to the seller and getting the lowest price that the market will allow. They’ll also guide you through the best strategy, such as whether to put in a firm or conditional offer.

3 – Prepare for closing: The home buying process is about to wrap up. During closing, your real estate lawyer will run a title search and arrange for title insurance.

With the help of a caring and knowledgeable Realtor® the whirlwind of buying your first house will soon be behind you. You’ll get your keys and you’re ready to move in and start creating your lasting memories.

If you want customized support when buying your first home, our Ottawa real estate agents are here for you. Reach out to us anytime at 613.829.7484 or email mail@chellteam.com with any questions you may have.