The most prepared buyers make the best decisions.
Buying your first home is exciting and nerve-wracking at the same time. This guide is a good place to start. It will help you understand the basics so you go in with clear eyes and find the right home for you and your family.
Programs Available to You
Combined first-time buyer savings in Ontario
Per couple using all available programs. Exact amounts depend on purchase price, savings, and whether you are buying in Toronto or elsewhere in Ontario.
The real answer
How do you actually qualify for a mortgage?
The most common question Jesse gets from first-time buyers is some version of this:
“I have no idea if I can even qualify. Where do I start?”
Qualifying for a mortgage comes down to five things. Lenders look at all of them together. Understanding each one tells you exactly where you stand and what, if anything, needs to change.
Your Down Payment
How much are you bringing to the table?
Your down payment is the portion of the price you pay upfront. The rest becomes your mortgage. In Canada, the minimum depends on the price of the home.
| Home Price | Minimum Down |
|---|---|
| Up to $500,000 | 5% |
| $500,001 to $1,499,999 | 5% on first $500k, 10% on the rest |
| $1,500,000+ | 20% minimum |
In real numbers: $600,000 home = $35,000 minimum. $800,000 home = $55,000. $1,000,000 home = $75,000.
Where it can come from: Your savings, FHSA withdrawal (tax-free, no repayment), RRSP via the Home Buyers' Plan (up to $60,000), or a gift from immediate family.
Your Income
Can you afford the monthly payment?
Lenders look at your gross income and use it to calculate the maximum mortgage payment you can carry.
For every $100k of income you will get roughly $500k in mortgage.
But income type matters:
- Salaried: Straightforward. Your T4 and pay stub tell the whole story.
- Salaried + Commission: Base salary is straightforward. Commission income typically requires a two-year average to be used in your application. The longer and more consistent the track record, the more a lender will count.
What about RSUs and stock compensation?
First, check if RSUs or stock compensation appear on your T4. If they do, lenders can typically count that income. If they do not, most lenders will not include them in your qualification. Some alternative lenders may consider them with a two-year vesting and liquidation history. Worth flagging early if stock compensation is a significant part of your total pay.
- Self-employed: Two years of T1 Generals and Notices of Assessment. The income lenders use is your net income after write-offs, which is often lower than what you would think of as your income. This is plannable. It just needs to be talked through early.
- Hourly or part-time: Lenders average your last two years. Consistent hours help.
- Contract or freelance: Two years of tax returns. If income varies year to year, they use the average.
Your Debt
Your other payments reduce how much mortgage you can carry.
Every monthly debt payment you have reduces your maximum mortgage amount. Car loan, student loan, credit card minimums. This surprises a lot of first-time buyers.
Lenders use two ratios to measure this.
Housing costs only (GDS)
Mortgage + property tax + heat + condo fees must stay under roughly 39% of your gross monthly income.
All debts combined (TDS)
Everything above, plus all your other monthly debt payments, must stay under 44% of your gross monthly income.
Paying down debt before applying directly increases your buying power, dollar for dollar. Paying down revolving debt (credit cards) helps more per dollar than installment debt (car loans). Jesse will show you exactly where to focus first.
Your Credit Score
It affects whether you qualify and what rate you get. The higher the number, the lower the risk, and the better the rate.
| Score | What it means for your mortgage |
|---|---|
| 720+ | Best available rates. No friction. |
| 680 to 719 | Excellent. Minor differences at most. |
| 620 to 679 | Qualifies with most lenders. Slightly higher rates. |
| 580 to 619 | Alternative lenders. Higher rates. Larger down payment often required. |
| Under 580 | Needs a repair plan first. Usually 6 to 12 months to get to prime rates. |
The Stress Test
You must qualify at a higher rate than you will actually pay.
Every mortgage applicant in Canada must qualify at a rate higher than they will actually pay. This reduces what you can borrow, but it also means you are protected if rates rise. The practical effect: you qualify for roughly 20% less than you would without the stress test.
You qualify at whichever of these two rates is higher:
Qualifying rate = MAX(5.25%, your contract rate + 2.00%)If your rate is 4.75%
Qualifying rate: 6.75%
4.75% + 2.00% = 6.75% (higher than floor)
If your rate is 3.00%
Qualifying rate: 5.25%
3.00% + 2.00% = 5.00% (below floor, so floor applies)
Credit deep dive
How your credit score is calculated, and how to fix it if it needs work.
Five factors determine your score. Each one carries a different weight.
Payment History
35%Whether you pay your bills on time. The single biggest factor. One missed payment can drop your score significantly and stays on your report for six years. Set up autopay for everything.
Credit Utilization
30%How much of your available credit you are using. If your credit card limit is $10,000 and your balance is $9,000, your utilization is 90%, and that is hurting your score. Keep your balance under 65% of your limit. Below 30% is even better in the months before you apply. This is one of the fastest things you can improve. Pay your balance down and your score can move in 30 to 60 days.
Length of Credit History
15%How long you have had credit. Older accounts help. This is why closing an old credit card, even one you do not use, can actually hurt your score. Keep old accounts open.
Credit Mix
10%Having different types of credit (credit card, car loan, line of credit) shows lenders you can manage different kinds of debt.
New Credit Inquiries
10%Every time you apply for new credit, a hard inquiry hits your report and temporarily lowers your score. In the 3 to 6 months before applying for a mortgage, do not apply for new credit cards, car loans, or lines of credit.
If your score needs work.
Here is the honest timeline. These assume you are actively paying down balances, making every payment on time, and not adding new debt.
| Starting Score | Target | Realistic Timeline |
|---|---|---|
| 650 to 679 | 680+ | 2 to 4 months |
| 620 to 649 | 680+ | 4 to 6 months |
| 580 to 619 | 620+ | 6 to 12 months |
| Under 580 | 580+ | 12 to 18 months |
The fastest moves, in order.
- Keep your credit card balances under 65% of their limit
- Set up autopay so you never miss a payment
- Stop applying for new credit
- Dispute any errors on your report (pull your actual report from Equifax.ca, not a third-party app)
Down payment math
How much do you actually need?
Canada uses a tiered minimum down payment system. The number depends on the purchase price. Here is exactly how it works.
| Purchase Price | Minimum Down Payment | Example | CMHC Insurance |
|---|---|---|---|
| Up to $500,000 | 5% | $500k = $25,000 | Required |
| $500,001 to $999,999 | 5% on first $500k + 10% on remainder | $800k = $55,000 | Required |
| $1,000,000 to $1,499,999 | 5% on first $500k + 10% on remainder | $1.2M = $95,000 | Required |
| $1,500,000+ | 20% minimum | $1.5M = $300,000 | Not available |
As of December 2024, the insured mortgage cap was raised from $1M to $1.5M. This is a meaningful change for Toronto buyers in the $1M-$1.5M range who previously needed 20% down.
CMHC Insurance Premiums
| Down Payment | LTV Ratio | Premium Rate | On $700k mortgage |
|---|---|---|---|
| 5% to 9.99% | 90.01% to 95% | 4.00% | $28,000 added to mortgage |
| 10% to 14.99% | 85.01% to 90% | 3.10% | $21,700 added to mortgage |
| 15% to 19.99% | 80.01% to 85% | 2.80% | $19,600 added to mortgage |
| 20%+ | 80% or less | None | $0 |
First-time buyers and new-build purchasers can now access 30-year amortization (as of Dec 15, 2024) with an additional 0.20% insurance surcharge. Lower monthly payments mean you qualify for more with the same income, but you do pay more in interest over the lifetime.
Down Payment Calculator
Target Home Price: $800,000
Minimum Down
$55,000
6.9% of price
CMHC Premium
$29,800
Total Cash Needed
$55,000
10% Down
$80,000
10.0% of price
CMHC Premium
$22,320
Total Cash Needed
$80,000
20% Down
$160,000
20.0% of price
CMHC Premium
None — $0
Total Cash Needed
$160,000
Save $29,800 in insurance
Need to know your full upfront costs?
Use the Closing Costs CalculatorPrograms available to you
First-Time Buyer Programs.
Most first-time buyers know about one or two of these. Very few know they can stack them. Here is every program available to you in Ontario and exactly what it does.
The FHSA is the best savings vehicle ever created for first-time buyers. It combines the best features of an RRSP and a TFSA simultaneously.
- •Contribute up to $8,000 per year, $40,000 lifetime
- •Contributions are tax-deductible, like an RRSP
- •Growth is tax-free, like a TFSA
- •Withdrawals for your first home purchase are completely tax-free
- •Unused contribution room carries forward (up to $8,000)
- •No repayment required. It is yours to keep.
- •Open one now even if you are years away. The clock is ticking on contribution room.
If you have existing RRSP savings, the HBP lets you withdraw up to $60,000 per person tax-free for your first home purchase. Remember: you are borrowing from your future retirement and must repay over 15 years.
- •$60,000 per person, $120,000 per couple
- •Must repay 1/15th per year starting the second year after withdrawal
- •Increased from $35,000 in April 2024
- •Can be combined with the FHSA for maximum impact
Ontario charges a land transfer tax on every home purchase. First-time buyers get a rebate of up to $4,000. If you are buying in Toronto, the city charges its own additional LTT, and first-time buyers get a rebate on that too, up to $4,475.
- •Ontario rebate: up to $4,000. Covers homes up to $368,000 fully, partial above that.
- •Toronto rebate: up to $4,475. Only if buying within Toronto city limits.
- •Must never have owned a home anywhere in the world to qualify.
- •Applied automatically at closing through your lawyer.
The year you buy, you get $1,500 back on your taxes. You claim it when you file your return. If you are buying with a partner, you can split it between you.
As of December 15, 2024, 30-year amortizations are available to all first-time buyers (any property type, not just new builds), plus anyone buying a new build. A 0.20% insurance premium surcharge applies. The longer amortization lowers your monthly payment, which improves your GDS ratio and effectively increases what you can qualify for.
- •Applies to insured mortgages (less than 20% down)
- •0.20% additional CMHC premium surcharge applies
- •Reduces your monthly payment by roughly $200-$350 per $500k borrowed
- •Increases maximum qualification by approximately $60,000-$80,000
The stacking story is the real headline.
A Toronto couple using FHSA plus HBP plus both LTT rebates plus 30-year amortization buying power does not save $5,000. They change their position by over $100,000. That is the conversation Jesse has on every first-time buyer call.
Total Advantage
$100k+
Working with Jesse costs you nothing. Lenders pay the broker's commission when a mortgage funds. He is licensed with FSRA (Financial Services Regulatory Authority of Ontario) and is legally required to act in your best interest.
Why Work With a Broker
The bank works for the bank.
The bank
Lender access
One lender, one set of products
Rate shopping
You visit each bank individually
Self-employed income
Strict net-income criteria
If you get declined
Start over somewhere else
Cost to you
Lender sets the rate
Who they work for
The bank
Your broker
Lender access
50+ lenders, hundreds of products
Rate shopping
Done for you across the full market
Self-employed income
Lenders matched to your income type
If you get declined
Moved to a lender that fits
Cost to you
Free. Lenders compete for your business
Who they work for
You
Ready to find out what you qualify for?
The full picture
Finding the Right Home.
Getting approved is only half the process. The other half is making sure you buy the right home, not just the one that fits the budget. The most expensive mistakes first-time buyers make are not financial. They are choosing a home that does not fit their life in two or three years.
Before you start viewing listings, think through these carefully.
Location & Neighbourhood
This is where you will live for the next five to ten years. Think beyond what looks good in photos.
- Commute: Drive the route during rush hour. A 20-minute commute on a Sunday is very different from a Tuesday at 8am.
- Daily life: Groceries, transit, parks, family doctor. Are the things you use every week actually close?
- Family proximity: If you have young kids or plan to, being close to family for support is worth more than an extra bedroom.
- Schools: Well-regarded schools directly affect resale value, even if you do not have children.
- Size and growth: Will this home fit you in three years? A couple buying today may need a second bedroom sooner than they think.
Must-Haves
- •Location and commute distance
- •Number of bedrooms and bathrooms
- •Parking requirements
- •Move-in date flexibility
- •Deal-breaker structural issues
Nice-to-Haves
- •Updated kitchen or bathrooms
- •Backyard or outdoor space
- •Garage or extra storage
- •Specific architectural style
- •Proximity to specific amenities
The Buying Process.
From your first offer to closing day, here is every step.
Offer accepted
Day 1Your conditions period begins. Your deposit cheque is delivered to the listing brokerage.
Conditions period
Days 1-7This is your safety net. Typical conditions include financing approval, home inspection, and property disclosure review.
Home inspection
Days 3-5Hire a certified inspector ($400 to $600). They check structure, electrical, plumbing, roof, and more. Attend the inspection if you can.
Financing confirmed
Days 5-7Your broker submits the full application. The lender reviews the property and confirms your approval.
Conditions removed
Day 7You waive conditions and the sale becomes firm. Backing out after this means losing your deposit.
Lawyer prepares closing
Weeks 2-4Your lawyer conducts a title search, prepares transfer documents, coordinates with the lender, and arranges title insurance.
Final walkthrough
1-3 days beforeVerify the property is in the condition agreed upon. Check that nothing has been removed or damaged.
Keys are yours
Closing dayFunds transfer from lender to seller through lawyers. You pick up the keys and become a homeowner.
Working with a Realtor
A buyer's agent represents your interests during the search and negotiation. In most cases, the seller pays the buyer's agent commission, so working with an experienced realtor costs you nothing. Look for an agent with experience in your target area and price range.
Jesse works with great realtor partners and can refer someone if they are the right fit for your situation.
The Ongoing Cost of Owning.
Your mortgage payment is not your only monthly cost. Budget for these before you decide what you can afford.
Property Tax
In Toronto, roughly 0.6% of assessed value annually. Varies by municipality.
Home Insurance
Required by your lender. Typically $100 to $250 per month.
Maintenance
Budget 1% to 3% of your home's value per year for upkeep.
Hydro and Gas
Budget $200 to $400 per month depending on home size and season.
Emergency Repairs
Furnace, roof, plumbing. Things break without warning. Keep a separate fund.
Condo Fees
If buying a condo, monthly fees cover shared maintenance and insurance. Check for special assessments.
Want an exact closing costs estimate?
Use the Closing Costs CalculatorWhat to avoid
The six mistakes first-time buyers make most often.
These are not hypothetical. Jesse sees versions of these regularly. Knowing them in advance gives you a real advantage.
01
Waiting until they have 20% down
The cost of CMHC insurance is almost always less than years of rent paid while waiting. Run the real numbers before you decide to wait.
02
Going to their bank first
One lender, one rate sheet, one set of criteria. If you don't fit, you're declined. A broker assesses 50+ lenders and finds the right match, often at a better rate.
03
Not opening an FHSA years before buying
Every year you wait is $8,000 in contribution room lost forever. You can open an FHSA today even if you are not buying for three years. The clock starts immediately.
04
Financing a car after getting pre-approved
A new car payment changes your TDS ratio. It has ended deals between pre-approval and closing. Do not finance anything major until the keys are in your hand.
05
Spending the maximum approval amount
Your approval is a ceiling. The right number is the payment that fits your actual life, including the unexpected expenses that come with owning a home.
06
Focusing only on the interest rate
Prepayment privileges, portability, and penalty type matter just as much. A slightly higher rate with flexible prepayment terms can save you significantly more over the term.
Common questions
Things first-time buyers ask.
Gift funds from immediate family members are acceptable as a down payment source for most lenders. You will need a signed gift letter confirming the funds are a gift and not a loan, plus 90 days of bank statements showing the funds.
The FHSA lets you save up to $8,000 per year, to a lifetime max of $40,000, in a tax-sheltered account specifically for buying your first home. Contributions are tax-deductible like an RRSP, and withdrawals for a qualifying home purchase are completely tax-free. Unlike the Home Buyers' Plan, there is no repayment requirement.
Yes, and this is one of the most powerful moves available to first-time buyers. A couple using both can access up to $200,000 combined ($40k FHSA each plus $60k HBP each). The FHSA has no repayment requirement. The HBP must be repaid over 15 years.
Unfortunately, no. If your partner is on the title and mortgage, their ownership history applies to the application. This means programs like the FHSA withdrawal, the Home Buyers' Plan, and the land transfer tax rebate would not be available to you as a couple. It is worth discussing your specific situation with Jesse to understand your options.
Most prime lenders want a score of 680 or higher. Between 620 and 679, you can still qualify but may see slightly higher rates. Below 620, alternative lenders are an option with higher rates and larger down payment requirements. The score your bank app shows you is often different from the one lenders pull directly from Equifax or TransUnion.
Before approving your mortgage, every federally regulated lender must confirm you can afford payments at a rate higher than the one you are actually getting. The test rate is the greater of 5.25% or your contract rate plus 2%. This means you qualify at a higher payment than you will actually make, which is designed to protect you if rates rise.
It is harder but not impossible. Most prime lenders require two years of tax returns to verify self-employed income. If you have less than two years, some alternative lenders and credit unions will work with you, though rates may be higher and a larger down payment is often required. Talk to Jesse early so you know exactly where you stand.
If you are moving to a similar role in the same industry at a similar salary, it is usually straightforward. But there are factors to consider. You will need to have passed your probation period and collected your first paycheque. If you currently earn commission, your existing employer's track record can be used on your application. Switching jobs means starting that history over with projected income, which is harder for lenders to work with. If you can, the best move is to wait until you close on your new home before switching jobs.
Ready to get started?
Book an intro call and get prepared to make the right decision. Buying the right home is one of the most important financial moves you will make. Jesse can't wait to help you get started.
