The first thing you’ll need to do is put money aside for a down payment. In Canada, the minimum deposit for a home purchase generally depends on the purchase price. For homes under $500,000, the minimum is 5%. For homes between $500,000 and $1.5 million, it's 5% of the first $500,000 plus 10% of the remaining portion. For homes $1.5 million or more, the minimum is 20%.
Example: Let's say you're buying a home for $700,000
- 5% of the first $500,000: $25,000
- 10% of the remaining $200,000: $20,000
- Total minimum down payment: $25,000 + $20,000 = $45,000
Second, you’ll need to meet with a mortgage broker, or discuss with your bank to determine what you can afford. Shopping around for the best rate is highly recommended.
Upfront costs typically include:
- the down payment
- home inspection and appraisal fees
- insurance costs
- land registration fees
- prepaid property taxes or utility bills (the buyer reimburses the seller or builder)
- legal or notary fees
- potential repairs or renovations
- moving costs
- GST/HST/QST on a newly built house or mortgage loan insurance