First-Time Home Buyer Guide Canada 2026
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Buying your first home in Canada shouldn't feel like assembling IKEA furniture blindfolded. Yet that's exactly how most first-time buyers describe it—parts everywhere, conflicting advice from friends and family, and one nagging question: "Am I missing something important?"
We've guided hundreds of first-time buyers through their purchases in Ottawa, and the pattern is clear: buyers who succeed treat this like a project with clear milestones, not an emotional rollercoaster. This guide breaks down exactly what you need to know about your down payment strategy, the Canadian mortgage process, making offers that protect you, and the costs that catch people off guard after closing.
Most programs define "first-time buyer" as someone who hasn't owned a principal residence in the current year or the previous four calendar years. Rules vary by program, so confirm the specifics before you commit to any strategy.
Your Down Payment Strategy: FHSA, Home Buyers' Plan, and Tax Credits
Your down payment is one piece of a larger financial puzzle. We see buyers focus solely on hitting their 5% or 20% target, then scramble when closing costs, moving expenses, and immediate repairs show up.
A solid down payment strategy in Canada typically combines three government programs:
First Home Savings Account (FHSA): Tax-deductible contributions going in, tax-free withdrawals coming out for your first home purchase.
RRSP Home Buyers' Plan: Borrow up to $60,000 from your own retirement savings without immediate tax consequences, then repay over 15 years.
First-Time Home Buyers' Tax Credit and provincial rebates: Non-refundable federal tax credits plus Ontario's land transfer tax rebate (up to $4,000) can reduce your closing day hit significantly.
Always verify current rules with CRA and your mortgage professional. Programs change, and your personal situation determines what works best.
How the First Home Savings Account Works
The FHSA is purpose-built for Canadians saving for their first home. Used correctly, it's one of the most efficient down payment tools available.
Key FHSA Rules:
- Must be a Canadian resident, at least 18 years old, and meet the first-time buyer definition
- Annual contribution limit: $8,000
- Lifetime contribution limit: $40,000
- Contributions are tax-deductible (like RRSPs)
- Qualifying withdrawals are tax-free (like TFSAs)
- Can be used alongside the Home Buyers' Plan
Watch Out For:
Over-contributing triggers penalties. Track your deposits carefully throughout the year.
Qualifying withdrawals have specific timing and documentation requirements. Don't leave paperwork for the last minute.
If you don't buy, you're not trapped. Transfer funds to an RRSP or RRIF without immediate tax consequences, or withdraw as taxable income based on your timeline.
Real Numbers Example:
Contributing $8,000 to your FHSA this year at a 30% tax rate returns approximately $2,400 at tax time. Deposit that refund into savings, and your $8,000 contribution becomes $10,400 toward your down payment—without changing your monthly budget.
Still deciding if buying makes sense right now? Compare home ownership versus renting in Ottawa to clarify your timeline.
Home Buyers' Plan: The Details That Matter
The Home Buyers' Plan lets you withdraw up to $60,000 per person from your RRSP for a home purchase ($120,000 for couples). Think of it as a structured loan from your future self.
Repayment Structure:
You repay the withdrawn amount over 15 years. Each year has a minimum repayment requirement. Miss a payment, and that amount gets added to your taxable income for the year.
Common Mistakes We See:
The 90-day rule: RRSP contributions must sit in your account for at least 90 days before you can withdraw them under the Home Buyers' Plan. Contribute and withdraw too quickly, and you lose the tax advantage.
Ignoring the repayment schedule: It's easy to forget about future payments when you're focused on moving day. Set annual reminders now.
Treating it like free money: This reduces your retirement savings unless you commit to consistent repayments.
Our recommended approach: Max out your FHSA first (tax-free withdrawals beat tax-deferred), then tap the Home Buyers' Plan if you need additional down payment funds.
The Canadian Home Buying Process: Pre-Approval to Closing
The buying process follows a predictable rhythm in Canada, though provincial details vary. Your team—real estate professional, mortgage specialist, and real estate lawyer—each handle different pieces of the transaction.
Typical Timeline:
- Mortgage pre-approval and budget confirmation
- Home search with your real estate professional
- Offer and negotiation
- Conditional period (financing, inspection, condo document review)
- Firm agreement and final mortgage approval
- Lawyer work, title search, closing adjustments
- Closing day and possession
This process takes anywhere from one month to six months. Both timelines are completely normal.
Mortgage Pre-Approval: What Lenders Actually Look At
Pre-approval establishes your realistic price range before you start touring homes. It's your starting line, not your finish line.
Lenders Evaluate:
- Gross monthly income and employment stability
- Debt-to-income ratio (all monthly obligations divided by gross income)
- Credit score and payment history
- Down payment source and verification
Documents to Gather:
- Recent pay stubs (typically 2-3)
- Employment letter (role, salary, start date)
- Two years of T4s and Notices of Assessment
- Bank statements showing down payment savings
- Complete list of debts with monthly payments
- Government-issued ID
The Mortgage Stress Test:
You must qualify at a rate higher than your contract rate—specifically, the greater of your contract rate plus 2%, or the Bank of Canada's benchmark qualifying rate. This applies whether you choose a fixed or variable mortgage and assumes a 30-year amortization.
This isn't banks being difficult. It's federal policy designed to protect buyers from rate increases.
Before you start shopping, run the numbers. Our mortgage calculator helps you estimate monthly payments and test different down payment scenarios.
Critical Budget Tip: Keep closing costs in a separate savings account. Even with your down payment ready, closing costs of 1.5-4% of the purchase price can create stress if you're not prepared.
Making an Offer That Protects You
When you find the right property, your offer establishes the terms of your purchase. The goal isn't just winning the house—it's securing a home you can afford and maintain without constant financial pressure.
Standard Offer Components:
- Purchase price
- Closing date
- Deposit amount and timing (this becomes part of your down payment)
- Included items and exclusions (appliances, window coverings, hot water tank rental agreements)
- Conditions (protection clauses)
Essential Conditions for First-Time Buyers:
Financing condition: Gives you time to finalize mortgage approval with your lender.
Home inspection condition: Allows you to hire a professional inspector and make an informed decision about the property's condition.
Condo status certificate review (for condominiums): Reveals the building's financial health, reserve fund status, rules, and any ongoing legal issues.
Why Inspections Matter:
Houses hide problems. Fresh paint covers stains but doesn't fix a failing roof. A thorough inspection report doesn't just identify issues—it helps you budget for repairs and maintenance over your first few years of ownership.
Your lender may also require an appraisal if the purchase price seems inconsistent with recent comparable sales.
Want to see what homes actually sell for in Ottawa? Get in touch for a custom list to ground your expectations in real market data.
Considering new construction? The process works differently, with phased deposits and extended timelines. Start with our guide: Buying new construction in Ottawa.
Closing Costs and First-Year Expenses Most Buyers Forget
The fastest way to turn a smooth closing into a stressful experience? Spend every available dollar on your down payment and leave nothing for everything else.
We break down the additional costs into four categories:
One-Time Closing Costs (Due before or on closing day):
- Legal fees and disbursements ($1,500-$2,500 typically)
- Title insurance (usually $250-$400, arranged through your lawyer)
- Land transfer tax, minus first-time buyer rebate if applicable (Ontario offers up to $4,000 back; Toronto has an additional municipal tax)
- Adjustments for prepaid property taxes or condo fees
- Appraisal fee if required by your lender ($300-$500)
- CMHC insurance premium if your down payment is under 20% (typically added to your mortgage amount)
For new construction buyers, investigate the GST/HST new housing rebate—this can represent significant savings.
Move-In Costs (Around closing):
- Professional movers or truck rental
- Packing supplies
- Utility connection fees and deposits
- Minor repairs or cleaning before moving in
Ongoing Monthly Costs:
- Mortgage payment (principal, interest, and CMHC insurance if applicable)
- Property taxes (paid directly or collected with your mortgage)
- Home insurance (required by your lender)
- Utilities (electricity, gas, water, rental equipment)
- Condo fees if applicable (watch for special assessments)
- Internet and other services
Maintenance and Repairs (Unpredictable but guaranteed):
- Annual furnace servicing
- Roof maintenance and eventual replacement
- Plumbing repairs
- Seasonal upkeep
- Appliance failures
A practical rule: set aside 1-2% of your home's value annually for maintenance, even if nothing breaks. Some years you'll barely touch it. Other years it'll cover an emergency furnace replacement in February.
Ottawa property taxes vary significantly by neighbourhood and can change annually. Understanding Ottawa's property tax system helps you budget more accurately.
Your First-Year Home Plan:
We recommend prioritizing expenses this way:
- Safety and essentials first: Address any electrical issues, water problems, or structural concerns immediately
- Comfort upgrades second: Paint, lighting, and simple improvements that make the space feel like yours
- Build your emergency fund: Aim for 3-6 months of expenses, plus a separate home maintenance fund
Your Next Steps
Buying your first home in Canada becomes manageable when you treat it as a project with clear milestones. Use the FHSA and Home Buyers' Plan strategically to maximize your down payment without compromising your long-term financial stability. Get pre-approved early to establish your realistic budget. Keep your offer conditions clear to protect yourself during the transaction. Budget thoroughly for closing costs and your first year of ownership.
Ready to Start Your Home Buying Journey?
We've helped hundreds of Ottawa first-time buyers navigate this process successfully. Whether you're just starting to save or ready to make offers, we can show you exactly what to expect at each stage.
Contact the Campbell-Maric Group to discuss your specific situation and timeline. We'll walk you through the current Ottawa market, review your financial readiness, and create a personalized action plan.
Want to move faster when the right property appears? Learn about Secure My Offer—our program that positions you as a pre-approved, backed buyer who can compete effectively in competitive situations.
Your goal isn't a perfect purchase. It's a home you can afford comfortably and enjoy for years.
