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  • Canada First-Time Buyer Basics: What to Research First

    Canada First-Time Buyer Basics: What to Research First

    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

  • Understanding Credit Scores Before You Apply for a Mortgage

    Understanding Credit Scores Before You Apply for a Mortgage

    Your credit score isn’t the only thing a mortgage lender looks at, but it’s one of the first, and it can affect both approval and pricing. The upside is that a credit score isn’t a mystery. Once you know what goes into it and how to check your file for free, you can prepare months ahead instead of getting surprised in a lender’s office. This guide covers the basics for buyers in the United States and Canada.

    Educational only. We are not a lender or credit counselor, and nothing here is financial or legal advice. Lenders use different score models and their own criteria. Ask your lender which scores and thresholds apply to you.

    What a credit score actually is

    A credit score is a three-digit summary of the information in your credit report. Higher scores generally signal lower risk to lenders.

    • United States: FICO says its base scores range from 300 to 850.
    • Canada: Equifax Canada explains that Canadian scores are typically between 300 and 900.

    You don’t have just one score. Equifax Canada notes that the two Canadian bureaus may hold slightly different information, since not every creditor reports to both, and that lenders use many different scoring models. FICO also publishes different score versions for different types of lenders. So small differences between scores are normal.

    The five things a FICO Score looks at

    FICO groups the data from your credit report into five categories. It says these weights apply to the general population and can differ from person to person:

    FactorWeightWhat it means in practice
    Payment history35%Paying on time, every time
    Amounts owed30%How much of your available credit you’re using
    Length of credit history15%How long your accounts have been open
    New credit10%Recently opened accounts and applications
    Credit mix10%Having different types of credit

    Two takeaways: on-time payments and lower balances do most of the work. You can’t fake either. They build up over months, which is why it pays to start early.

    Step 1: Check your reports for free

    • U.S.: The FTC says AnnualCreditReport.com is the only website authorized to fill orders for the free reports you’re entitled to by law, and that you can check your report from each of the three nationwide bureaus there once a week for free.
    • Canada: The Financial Consumer Agency of Canada (FCAC) explains how to get your free credit report from Equifax and TransUnion, online, by mail or by phone.

    Look for accounts you don’t recognize, late payments you believe are wrong, and incorrect personal details. The FTC says to dispute mistakes with the credit bureau and with the business that supplied the information. Disputes can take time, so do this well before you apply. The CFPB notes that checking your own credit does not affect your scores.

    Step 2: Strengthen what you can in the months before applying

    General habits that line up with the factors above:

    • Set up autopay or reminders so no payment slips.
    • Pay down revolving balances where you can, rather than moving them around.
    • Avoid opening new credit you don’t need just before a mortgage application.
    • Keep older accounts in good standing. They add to the length of your history.

    There’s no guaranteed “score boost”, so be wary of any service that promises a quick fix.

    Step 3: Know that lenders look beyond the score

    Your score sits alongside your income, job stability, savings and existing debts. The CFPB explains your debt-to-income ratio (DTI): all your monthly debt payments divided by your gross monthly income. It’s one way lenders measure your ability to manage payments, and different loan products and lenders have different DTI limits. A strong score with a high DTI can still be a problem, so add up your own numbers before a lender does.

    Step 4: Rate-shop without fear (US)

    Many buyers worry that comparing lenders will hurt their credit. The CFPB says that within a 45-day window, multiple credit checks from mortgage lenders are recorded as a single inquiry. Shopping around is usually worth it even if a check falls outside that window. Gather your quotes within a focused period, then compare them. Our first-time buyer guide explains preapproval.

    In Canada, rules and practices can differ, so ask each lender or broker how their credit check will be recorded before you agree to it.

    A simple 90-day prep plan

    • Day 1: Pull your reports (US: all three bureaus; Canada: Equifax and TransUnion).
    • Week 1–4: Dispute any errors. Set up autopay.
    • Month 1–3: Bring card balances down. Avoid new credit applications.
    • Month 3: Recheck your reports, calculate your DTI, then start talking to lenders.

    Keep learning

    For score ranges, factors and free-check links in one place, see our credit score guide. For loan types and Canadian specifics like the stress test, visit buying basics.

    Last checked: 5 October 2026. Score models and lender criteria change. Confirm with your lender and the official sources above.

    Sources