Buying a House in Canada: Step-by-Step Guide

Buying a house is likely the largest purchase you'll ever make. This guide walks you through the process from start to finish.

Calculate What You Can Afford

• Gross Debt Service (GDS): Housing costs should be ≤32% of gross income
• Total Debt Service (TDS): All debts should be ≤40% of gross income

Down Payment

• Minimum 5% for homes under $500K
• 5% on first $500K, 10% on remainder up to $1M
• 20% required for homes over $1M

Use our Affordability Calculator and Mortgage Calculator to determine your budget.

Why Pre-Approval Matters

• Locks in interest rate for 90-120 days
• Shows sellers you're serious
• Identifies your true purchasing power
• Speeds up the buying process

What You'll Need

• Proof of income (T4, pay stubs, Notice of Assessment)
• Employment verification
• Down payment verification (bank statements)
• Government ID
• Credit check authorization

What to Look For

• Local market knowledge
• Full-time real estate professional
• Good communication and responsiveness
• References from past clients
• Knowledge of your target neighborhoods

How Agents Are Paid

• Commission paid by the seller
• Typically 2-2.5% of purchase price
• No cost to you as a buyer

What to Look For

• Location: Neighborhood, schools, transit, amenities
• Property type: Detached, semi-detached, townhouse
• Size: Bedrooms, bathrooms, square footage
• Condition: Move-in ready vs needs work
• Lot characteristics: Size, orientation, drainage

View Multiple Properties

• See at least 5-10 properties before making an offer
• Take notes and photos at each viewing
• Visit at different times of day
• Check the neighborhood on weekends and evenings

Components of an Offer

• Purchase price
• Deposit amount (typically 5% of purchase price)
• Conditions (financing, inspection, status certificate)
• Closing date (typically 30-90 days)
• Inclusions (appliances, fixtures)

Negotiation

• Your agent will help determine a fair price
• In seller's markets, you may need to offer above asking
• In buyer's markets, you can negotiate below asking
• Consider conditions carefully (removing conditions makes offers more competitive but riskier)

Home Inspection

• Hire a certified home inspector
• Cost: $400-$600
• Identifies structural, mechanical, and safety issues
• Can be a negotiation tool for price or repairs

Other Inspections

• Well water test (rural properties)
• Septic inspection (rural properties)
• Pool inspection (if applicable)
• Pest inspection (termite, carpenter ant)

Final Mortgage Approval

• Provide updated documents to your lender
• Lender orders property appraisal
• Final approval typically takes 3-5 business days
• Don't make large purchases or change jobs during this period

What Happens on Closing

1. Your lawyer receives mortgage funds
2. Title transfers to your name
3. Land transfer tax is paid
4. Keys are released

Closing Costs

Use our Closing Cost Calculator:

• Land transfer tax (varies by province)
• Legal fees ($1,000-$2,500)
• Title insurance ($200-$400)
• Home inspection ($400-$600)
• Property tax adjustments

Ontario

• Land transfer tax (first-time buyer rebate up to $4,000)
• Toronto has additional municipal LTT
• Uses lawyers for real estate transactions

British Columbia

• Property Transfer Tax (first-time buyer exemption under thresholds)
• Uses lawyers or notaries
• Foreign buyer tax may apply

Alberta

• No land transfer tax (small registration fee)
• Lower closing costs overall
• Uses lawyers

Buying a house is a multi-step process that requires preparation, patience, and professional guidance. Use our tools: Mortgage Calculator, Affordability Calculator, Closing Cost Calculator. Visit the AI Advisor for personalized advice, and the Q&A Community for buyer discussions.

This guide is for educational purposes only.