Buying Your First Home in Ontario

According to a recent Ipsos study¹, 80% of Canadians believe that owning a home in Canada is only for the rich. With home ownership increasingly seen as out of reach for most, we’re reminding first-time home buyers of the many options available to help them successfully enter today’s market. 

The following are FIVE considerations every new home buyer should keep in mind: 

1 – Understand the Costs

When purchasing a home, it’s crucial to be aware of all associated costs, not just the price of the property. Apart from your down payment, you should budget for: 

• Utilities: Services like hydro, water, and even internet should be considered when assessing a home’s affordability. Be sure to ask about any ‘hook up’ or ‘transfer’ fees to be prepared for the full cost. 

• Closing Costs: These include legal fees, land transfer taxes, and any other administrative fees. 

• Property Taxes: Ongoing annual taxes that vary based on the property’s value and location. Note that your annual taxes will vary year-over-over as your property gets assessed annually.  

• Home Insurance: Protects your home and belongings against damage or theft. 

• Maintenance Costs: Regular upkeep and unexpected repairs. 

2 – Down Payment Requirements

In Ontario, the minimum down payment depends on the price of the home: 

• For homes priced up to $500,000: A minimum down payment of 5% is required. 

• For homes priced between $500,001 and $999,999: You’ll need 5% for the first $500,000 and 10% for the remaining amount. 

• For homes priced $1 million or more: The down payment starts at 20%. 

3 – Explore First-Time Buyer Incentives

• First Home Savings Account (FHSA): Offers tax-deductible contributions and tax-free withdrawals for first-time homebuyers. 

• Home Buyers’ Plan (HBP): Allows you to withdraw up to $60,000 from your RRSP for a down payment, with specific repayment terms. 

• First-Time Home Buyers’ Tax Credit (HBTC): First-time home buyers can claim a $10,000 credit, providing a tax rebate of up to $1,500. 

4 – Get Pre-Approved for a Mortgage with ECU

Before house hunting, getting pre-approved for a mortgage is essential. It helps you: 

• Determine Affordability: Understand how much you can borrow based on your financial situation. 

• Strengthen Your Offer: Being pre-approved makes you a more attractive buyer to sellers. 

5 – Additional Tips for Success

• Research Neighbourhoods: Browse different areas to find one that fits your lifestyle and budget. 

• Work with Real Estate Professionals: A knowledgeable real estate agent can guide you through the buying process and negotiate on your behalf. 

• Get a Home Inspection: Ensure the property is in good condition and identify potential issues before finalizing your purchase. 

With this guide, you’re well on your way to making informed decisions and finding your ideal first home in Ontario. For additional information, reach out to book an appointment one of our ECU Mortgage Specialists to find out what rebates you may be eligible for, and to discuss your mortgage pre-approval.

1 Source: Eight in Ten (80%) Believe that Owning a Home in Canada is Now Only for the Rich (https://www.ipsos.com/en-ca/eight-in-ten-believe-owning-home-in-canada-now-only-for-the-rich)