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Canada First-Time Buyer Basics: What to Research First

Canada First-Time Buyer Basics: What to Research First

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Buying your first home in Canada means learning a new vocabulary: insured versus uninsured mortgages, the stress test, FHSA, HBP. It’s easy to lose weeks reading opinions online. A better approach is to research a short list of official topics first, in the right order. This guide shows you where to start and which federal sources to read for each step.

Educational only. The Property Question is not a lender, mortgage broker or tax adviser. This article is general education, not financial, tax or legal advice. Federal rules, provincial programs and lender criteria change. Confirm everything with your lender or broker, a tax professional, and the official pages linked below.

1. Your credit file

Start with what lenders will see. Equifax Canada explains that Canadian credit scores are typically between 300 and 900. The Financial Consumer Agency of Canada (FCAC) explains how to get your free credit report from both national bureaus, Equifax and TransUnion.

Check both reports for errors and accounts you don’t recognize, and dispute mistakes early. For a deeper explainer, see our credit score guide.

2. Down payment rules and mortgage loan insurance

This is the biggest early question for most buyers. CMHC explains that if your down payment is less than 20%, you’ll need mortgage loan insurance, which protects your lender if you can’t make your payments. As of 5 October 2026, CMHC’s page sets out the minimum down payment by purchase price:

  • Home costs $500,000 or less: minimum 5% down
  • Home costs more than $500,000: 5% on the first $500,000 and 10% on the remainder
  • Home costs $1,500,000 or more: mortgage loan insurance is not available

Thresholds can be updated, so read CMHC’s page in full before you plan around them. The insurance premium is a real cost. CMHC says it’s calculated as a percentage of the mortgage, based on the size of your down payment, and that your lender will likely pass it on to you, either as a lump sum or added to your mortgage. CMHC publishes a premium chart, so run your own numbers rather than relying on rules of thumb.

3. The mortgage stress test

Even if you can afford the payment at today’s rate, lenders must check that you could still afford it at a higher one. OSFI calls this the minimum qualifying rate (MQR), a stress test it requires federally regulated lenders to apply to borrowers. For uninsured mortgages, OSFI describes two components (as of 5 October 2026):

  • The buffer, currently 2% above your contract rate
  • The floor, currently 5.25%

You’re tested at whichever is higher. OSFI says it reviews both the floor and the buffer at least annually. Our buying basics page covers this in more detail. Ask your lender how qualification works for an insured mortgage too, as the process can differ.

4. Federal savings tools: FHSA and the Home Buyers’ Plan

Two Canada Revenue Agency (CRA) programs are worth researching early, because timing matters:

  • First Home Savings Account (FHSA). As of 5 October 2026, CRA’s FHSA pages state that your participation room is $8,000 in the year you open your first FHSA, with a lifetime limit of $40,000. Some unused room can be carried forward, up to a cap.
  • Home Buyers’ Plan (HBP). This lets you withdraw from your RRSPs to buy or build a qualifying home if you meet the conditions. As of 5 October 2026, CRA states that the HBP withdrawal limit is $60,000 and that withdrawals are paid back to your RRSPs over a period of up to 15 years.

Eligibility rules for both are detailed. Read CRA’s own pages, or talk to a tax professional, before opening accounts or making withdrawals.

5. Provincial and municipal costs

Some of the biggest closing costs are set provincially or locally. These include land transfer taxes (with first-time buyer rebates in some places), legal fees and property taxes. They vary by province and city, so look up your province’s official page and ask your real estate lawyer or notary for an estimate. (We don’t list provincial amounts here because they differ and change.)

6. Your budget beyond the mortgage

Lenders look at your debt service, but you have to live with the payment. Add up:

  • mortgage payment (at a realistic rate, not just the best advertised one)
  • property tax, home insurance and utilities
  • condo fees, if any
  • maintenance and an emergency fund

Treat any online affordability calculator’s result as a starting point, not a decision.

7. Then talk to lenders or a broker

Once you’ve done this groundwork, you’ll have better conversations. Questions to ask:

  • Am I looking at an insured or uninsured mortgage, and why?
  • What rate am I being stress-tested at?
  • How will your credit check be recorded?
  • What documents do you need for preapproval?

Research order, at a glance

  1. Free credit reports (Equifax + TransUnion)
  2. Down payment and mortgage loan insurance (CMHC)
  3. Stress test (OSFI)
  4. FHSA and HBP (CRA)
  5. Provincial and local closing costs
  6. Full monthly budget
  7. Lender or broker conversations

Newcomers to Canada

If you’ve recently arrived, credit history and income documents can work differently for you. Our buying basics page is a good starting point. Ask lenders about their newcomer requirements directly, and see our First-Time Buyers path for the full process.

Last checked: 5 October 2026. Figures above come from official pages on that date and can change. Confirm before you act.

Sources

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