How to Buy a House in Canada: A Step-by-Step Guide (With Real Costs to Expect)
Buying a home in Canada isn’t one single “process.” It’s a chain of decisions—budget, neighbourhood, mortgage, offer strategy, inspections, legal steps—where small mistakes get expensive fast. The good news: once you understand the order of operations, the whole thing becomes manageable. Even boring.
This guide breaks down how to buy a house in Canada from planning to closing, including the down payment rules used by Canadian lenders, what closing costs usually look like, and a few recent rule changes that surprised a lot of buyers.
Quick reality check: In Canada, if your down payment is under 20%, you’ll typically need mortgage loan (default) insurance. And as of December 15, 2024, the federal government increased the insured mortgage price cap to $1.5 million and expanded 30-year amortizations for insured mortgages to all first-time homebuyers and purchasers of new builds (see the Department of Finance announcement).
1) Decide what “affordable” means (before you look at listings)
Most buyers start with price. That’s backwards. Start with monthly carrying cost—then work your way back to price. Because your mortgage payment is only part of the bill.
Your real monthly cost usually includes
- Mortgage payment (principal + interest)
- Property taxes (varies by city/municipality)
- Home insurance
- Condo fees (if applicable)
- Utilities + maintenance buffer (you’ll want one)
And don’t ignore upfront cash. The down payment is obvious. The closing costs are what catch people off guard.
2) Understand down payment rules in Canada (the part lenders won’t bend)
Canada’s minimum down payment depends on the purchase price. The federal government’s financial consumer guidance lays out the rules clearly, and lenders follow them because insured vs. uninsured lending changes the risk profile.
Minimum down payment (commonly used thresholds)
- 5% of the purchase price for homes up to $500,000
- 5% on the first $500,000 and 10% on the portion from $500,000 to $999,999
- 20% for homes priced at $1 million+ (and you typically can’t use mortgage default insurance above certain caps)
Source: Government of Canada (Financial Consumer Agency) down payment guidance.
If your down payment is less than 20%, you’ll generally need mortgage loan insurance (often called mortgage default insurance). CMHC explains that it’s required when the down payment is under 20%—and it protects the lender, not you.
3) Get mortgage pre-approval (so you can move like a serious buyer)
Pre-approval isn’t just a number. It’s your reality check. It tells you what a lender is willing to back, what rate assumptions they’re making, and what documents you’ll need to close without drama later.
Typical documents lenders ask for
- Proof of employment and income (pay stubs, employment letter, or self-employment documents)
- Credit check authorization
- Bank statements (down payment + closing funds)
- ID and residency status documents
But here’s the thing—pre-approval doesn’t mean you should borrow the maximum. The maximum is where budgets go to die. Build breathing room.
4) Choose your team: real estate agent, mortgage broker, lawyer
You can buy without an agent in some cases, but most buyers use one—especially in competitive markets where timing and offer strategy matter. A mortgage broker can help you compare lenders. And a real estate lawyer is not optional at closing. They’ll handle title transfer, registered documents, and the final money movement.
If you’re buying from abroad or traveling during your search: staying reachable matters more than people expect—missed calls can mean missed showings or delayed signatures. Some buyers use an international travel eSIM like zetsim so their phone data works reliably while they’re in Canada for viewings and meetings.
5) Start house hunting with a filtering system (not vibes)
The fastest way to burn out is to tour everything. Set rules and stick to them. Non-negotiables first. Nice-to-haves second. Dreams third.
Practical filters buyers actually use
- Commute time (not distance) at your real travel hours
- School catchment or daycare proximity (if relevant)
- Property type trade-offs: detached vs. townhouse vs. condo
- Renovation tolerance (money is one thing; time is another)
6) Make an offer (and understand conditions)
An offer to purchase is a legal document. It’s also a negotiation. The price matters, sure, but so do conditions, deposit amount, timelines, included items, and what happens if the appraisal comes in low.
Common offer conditions
- Financing condition (gives you time to finalize the mortgage)
- Home inspection condition (lets you inspect before committing)
- Status certificate review (for condos; critical)
And yes, sometimes buyers waive conditions to compete. That can work. It can also go spectacularly wrong. Don’t do it casually.
7) Do the inspection and due diligence (the “find problems before you own them” stage)
A home inspection won’t predict the future, but it can reveal big-ticket issues—roofing, foundation concerns, moisture, outdated electrical, HVAC problems. Use the report as a decision tool. If the home needs work, your decision isn’t “buy or don’t buy.” It’s “buy at this price with this risk, or walk.”
8) Budget for closing costs (this is where first-time buyers get surprised)
The Government of Canada’s guidance on buying a home emphasizes that you’ll pay one-time upfront costs in addition to your mortgage. Translation: you need cash beyond your down payment.
Common closing costs in Canada
- Legal fees and disbursements (lawyer/notary)
- Land transfer tax (varies by province; some cities add municipal versions)
- Title insurance
- Home inspection fee
- Appraisal fee (sometimes lender-paid, sometimes not)
- Adjustments (prepaid property taxes/condo fees, utilities, etc.)
If you’re putting less than 20% down, mortgage loan insurance premiums may apply (your lender arranges it; the premium is often added to your mortgage). CMHC’s explainer is a solid place to understand how this works.
9) Closing day: what actually happens
On closing day, your lawyer coordinates the transfer—money moves, title registers, keys get released. It’s anti-climactic when done right, which is exactly what you want.
What you’ll typically need ready
- Certified funds / wire for closing (your lawyer will tell you the exact amount)
- Proof of home insurance (often required by the lender before funding)
- Government-issued ID
And if you’re landing in Canada just before closing, don’t gamble with connectivity—2FA codes, banking approvals, and last-minute calls are part of real life. Some international buyers keep a travel eSIM (like zetsim) active so their data works the moment they arrive.
Special case: buying a house in Canada as a non-Canadian
If you’re not a Canadian citizen or permanent resident, you need to pay attention to federal rules restricting purchases of certain residential property by non-Canadians. The rules stem from the Prohibition on the Purchase of Residential Property by Non-Canadians Act and related regulations and updates (CMHC maintains a professional-facing overview page as well).
There are exemptions and edge cases (for example, some categories of temporary residents, and certain purchases related to development can be treated differently). Don’t assume you qualify. Get legal advice early—before you make offers, not after you fall in love with a place.
Pro move: If your status is complex (work permits, time in Canada, property type), bring the question to a Canadian real estate lawyer in writing. You want a clear, documented answer tied to your exact facts.
Recent mortgage rule changes worth knowing
Canada’s mortgage policy does change. Sometimes quietly. Sometimes with a headline.
- Insured mortgage cap increased to $1.5 million effective December 15, 2024 (Department of Finance).
- 30-year amortizations for insured mortgages expanded to all first-time homebuyers and all purchasers of new builds, also effective December 15, 2024 (Department of Finance).
If you’re shopping near the edges of qualification, these changes can matter. A lot. But don’t treat them as “free money.” Longer amortization can reduce payments—while increasing total interest over time.
A simple checklist: how to buy a house in Canada (in the right order)
- Set a monthly budget that includes taxes, insurance, fees, and maintenance
- Save down payment + a separate closing cost buffer
- Get mortgage pre-approval
- Hire your agent and choose a real estate lawyer early
- House hunt with clear filters (neighbourhood, property type, commute)
- Make an offer with smart conditions
- Complete inspection/condo document review
- Finalize financing and insurance
- Close with your lawyer and get the keys
FAQ: Buying a home in Canada
Who qualifies as a first-time homebuyer in Canada?
“First-time homebuyer” can depend on the specific program or lender criteria. For mortgage rule changes announced by the federal Department of Finance (like expanded access to 30-year amortizations for insured mortgages), qualification is tied to the applicable federal definitions and insurer/lender implementation. Confirm with your lender or broker for your exact case.
What are the steps to buying a house in Canada?
Budget for monthly carrying costs, save your down payment and closing funds, get mortgage pre-approval, pick your agent and lawyer, house hunt, make an offer with conditions, complete inspection/due diligence, finalize financing and insurance, then close through your lawyer.
When is the best time to buy a house in Canada?
In practice, the “best time” is when your financing is solid and you can hold the home through market noise. Seasonality exists (spring can be competitive), but your personal readiness—stable income, manageable debt, cash for closing—is the real timing factor.
Where can I find reliable homebuying resources for Canada?
Two trustworthy starting points are the Government of Canada’s buying-a-home pages and CMHC’s step-by-step homebuying guide and workbook, which walk through preparation, budgeting, and closing.
Why is a home inspection important before buying in Canada?
Because you want problems revealed while you still have choices. Inspections can flag costly issues (roofing, moisture, structural concerns, old electrical). Even when you proceed, the report helps you budget and prioritize repairs.
Which down payment do I need in Canada?
The minimum depends on purchase price. Commonly, it’s 5% up to $500,000, and for homes above $500,000 up to $999,999 it’s 5% of the first $500,000 and 10% of the remainder. If you put less than 20% down, you’ll typically need mortgage loan (default) insurance.
How long does it take to complete a house purchase in Canada?
Timelines vary by offer terms and local practice, but you’ll usually have a conditional period (for financing/inspection) followed by a closing period set in the contract. Your agent and lawyer can map the dates the moment your offer is accepted.
Will I need mortgage default insurance in Canada?
Often, yes—if your down payment is less than 20%. CMHC explains that mortgage loan insurance (mortgage default insurance) is required in Canada when the down payment is under 20% and it protects the lender.
