Understanding Your Budget

The gap between "I think I can afford a home" and "I actually understand what I can afford" causes more stress than almost anything else in this process. You've got a pre-approval number, but what does that really mean in dollars you'll need to have—and dollars you'll pay each month?

Let's close that gap.

Your Numbers at a Glance

Your down payment of [Loading...] represents [Loading...] of the purchase price.

Purchase Price Is Just the Beginning

The price on the listing is where the math starts, not where it ends. To actually close on a home, you'll need to account for:

Your down payment — The cash you bring to the table. The minimum requirements work on a tiered system:

Mortgage default insurance — Required when your down payment is less than 20%. We'll explain this below.

Closing costs — Legal fees, land transfer taxes, title insurance, and other one-time costs. Typically 1.5% to 4% of the purchase price depending on your province. We'll break these down in detail in the Closing Costs section.

Monthly carrying costs — Your mortgage payment is the big one, but there's also property tax, home insurance, utilities, and—for condos—monthly strata or condo fees.

CMHC Insurance: What It Is and Why You're Paying It

Here's something that surprises most first-time buyers: mortgage default insurance protects the lender, not you. So why do you pay for it?

Because it's what makes your mortgage possible.

Lenders see higher risk when borrowers put down less than 20%. Insurance from CMHC (or one of the other insurers, Sagen or Canada Guaranty) protects them against that risk. In exchange for that protection, they're willing to offer you a mortgage you wouldn't otherwise qualify for—often at lower interest rates than uninsured mortgages.

The premium is calculated as a percentage of your mortgage amount, based on your loan-to-value ratio:

Your Debt Service Ratios

Lenders use two ratios to determine how much you can borrow:

Gross Debt Service (GDS) measures your housing costs against your income. It includes your mortgage payment (principal and interest), property taxes, heat, and 50% of condo fees if applicable. Lenders typically want this under [Loading...].

Total Debt Service (TDS) adds all your other debts—car payments, credit cards, student loans, lines of credit. The maximum is typically [Loading...].

Your ratios are well within the limits, which means your approval is solid.

What You'll Need in Cash

Before closing day, you'll need to have the following available—not locked in investments, not promised, actually accessible:

Your down payment is coming from multiple sources—we'll cover the specific steps for accessing each source in the next section.

What You'll Pay Monthly

Your mortgage payment is calculated based on the total mortgage amount, your interest rate, and your amortization period.

Your broker can help you model these numbers more precisely once you're closer to making an offer on a specific property.

Next: Your Down Payment Sources

Your down payment of [Loading...] may be coming from multiple sources—savings, registered accounts, family gifts, or other funds. Each source has its own documentation requirements and timing considerations.

Let's break those down.

Your Down Payment

Your down payment of [Loading...] represents [Loading...] of your target purchase price. Most buyers piece together funds from multiple sources—savings accounts, registered accounts, family gifts, or other assets. This is completely normal.

Each source has its own documentation requirements and, in some cases, specific steps to access the funds. Let's break down what applies to your situation.

Your Down Payment Sources

The sections that follow provide detailed guidance for each type of down payment source. Only the sections relevant to your sources will appear.

Why Lenders Ask for So Much Documentation

When you apply for a mortgage, the lender will ask for documentation on every dollar of your down payment. Bank statements going back 90 days, proof of where transfers came from, sometimes explanations for large deposits.

This isn't personal—it's standard compliance with anti-money laundering (AML) regulations. Lenders are required by law to verify that your down payment comes from legitimate, traceable sources. Every bank and mortgage lender follows the same rules.

The more organized your paper trail, the smoother this part of the process goes. The sections below will tell you exactly what documentation you need for each of your sources.

Documentation Checklist

Timing Matters

Each down payment source has different timing considerations:

Your broker can advise on what's workable for your specific timeline. If timing is tight, let them know early.

Source-Specific Guidance

The sections below cover each down payment source in detail. You'll only see the sections that apply to your situation:

Using Your RRSP: The Home Buyers' Plan

Using retirement savings for a down payment can feel uncomfortable—like you're raiding your future to pay for your present. The Home Buyers' Plan reframes that equation: you're not withdrawing from your RRSP, you're borrowing from yourself.

Here's how it works and exactly what you need to do.

How the Home Buyers' Plan Works

The HBP lets you withdraw up to [Loading...] from your RRSP tax-free to buy or build a qualifying home. If you're buying with a partner who also has an RRSP, they can withdraw up to [Loading...] as well—meaning a couple can access up to $120,000 combined.

Unlike a regular RRSP withdrawal, you won't pay income tax on this money. That's the key advantage. Normally, pulling $25,000 from your RRSP would add $25,000 to your taxable income for the year—potentially a tax bill of $7,000 or more depending on your bracket. With the HBP, you avoid that entirely.

The catch: You have to pay it back over 15 years.

Eligibility Requirements

Before you can withdraw, you need to confirm you meet the criteria:

• First-time buyer status: You haven't owned a home that you lived in as your principal residence in the past four calendar years. (There are exceptions for marriage/common-law breakdown.)
• 90-day holding period: The funds you're withdrawing must have been in your RRSP for at least 90 days before the withdrawal. Recent contributions don't qualify immediately.
• Written agreement: You must have a written agreement to buy or build a qualifying home (your Agreement of Purchase and Sale satisfies this).
• Intent to occupy: The home must become your principal residence within one year of buying or building it.

The Repayment Requirement

Think of the HBP as an interest-free loan from your future self. You have 15 years to repay it, starting two years after your withdrawal.

Each year during the repayment period, you'll need to contribute at least 1/15th of your withdrawal back to your RRSP and designate it as an HBP repayment on your tax return.

You can always pay more than the minimum. If you have a good year financially, paying back faster reduces the outstanding balance and the annual minimum going forward.

How to Withdraw Your HBP Funds

Step-by-Step Process

Step 1: Confirm your RRSP balance and holding period

Log into your RRSP account and verify that the amount you want to withdraw has been there for at least 90 days. If you made recent contributions you're planning to use, count back to ensure you've cleared the 90-day requirement.

Step 2: Contact your RRSP provider

Call your bank, credit union, or investment firm where your RRSP is held. Tell them you want to make a Home Buyers' Plan withdrawal. They'll guide you through their specific process.

Step 3: Complete Form T1036

Your provider will supply CRA Form T1036 (Home Buyers' Plan Request to Withdraw Funds from an RRSP). You'll fill in your details, the withdrawal amount, and sign a declaration that you meet the eligibility requirements.

Step 4: Wait for processing

Allow 5-10 business days for the withdrawal to process. Some institutions are faster; some take the full window. Plan accordingly—don't assume the funds will be available instantly.

Step 5: Receive your funds

The money will be deposited to your bank account or sent via cheque, depending on your provider's process. No tax will be withheld (unlike regular RRSP withdrawals).

Step 6: Keep your documentation

Hold onto your T1036 confirmation. You'll need to report the HBP withdrawal on your tax return for the year.

Timing It Right

The ideal sequence:

1. Ensure funds have been in your RRSP for 90+ days
2. Initiate the withdrawal once you have a firm closing date (or at least a signed Agreement of Purchase and Sale)
3. Allow at least 2-3 weeks before you need the funds at closing

If your timeline is tight, let your broker know. They can advise on whether the timing works or if adjustments are needed.

The Repayment Reality

Some buyers worry about the repayment commitment. Here's a more positive framing: the HBP essentially forces you to rebuild your retirement savings. Without it, many homeowners let RRSP contributions slide for years after buying. The repayment schedule keeps you on track.

And remember—it's interest-free. No bank would lend you [Loading...] for 15 years at 0% interest. Your future self is being remarkably generous.

Using Your FHSA: The Best of Both Worlds

The First Home Savings Account is one of the most powerful savings tools ever created for Canadian homebuyers. It combines the best features of an RRSP and a TFSA—and unlike the Home Buyers' Plan, there's no repayment required.

The money you withdraw from your FHSA is yours to keep, tax-free, permanently.

How the FHSA Works

The FHSA gives you tax benefits on both ends:

When you contribute: Your contributions are tax-deductible, just like an RRSP. If you contribute $8,000 in a year and your marginal tax rate is 30%, you'd get roughly $2,400 back at tax time.

While it grows: Any investment growth inside the account is tax-sheltered, just like a TFSA. You don't pay tax on interest, dividends, or capital gains while the money sits in the account.

When you withdraw for a home: The withdrawal is completely tax-free—again, like a TFSA. No tax on the way out, and no requirement to pay it back.

This "tax-free in, tax-free out" structure is unique. The RRSP is tax-free going in but taxed coming out. The TFSA is taxed going in but tax-free coming out. The FHSA skips both taxes.

Contribution Limits

If you don't max out in a given year, you can carry forward the unused room—but only up to [Loading...]. So if you contributed $5,000 one year, you could contribute $11,000 the next (the [Loading...] annual limit plus the $3,000 carried forward).

Eligibility Requirements

To make a qualifying withdrawal from your FHSA:

• First-time buyer status: Same definition as the HBP—you haven't owned and occupied a principal residence in the past four calendar years
• Written purchase agreement: You need an Agreement of Purchase and Sale for a qualifying home
• Canadian resident: You must be a Canadian resident at the time of withdrawal

Combining FHSA with the Home Buyers' Plan

Here's something many buyers don't realize: you can use both programs on the same home purchase.

How to Withdraw Your FHSA Funds

Step-by-Step Process

What Makes FHSA Different from HBP

The FHSA's "no repayment" feature is its biggest advantage. Your HBP withdrawal creates a 15-year obligation; your FHSA withdrawal is simply yours.

If You Don't End Up Buying

What happens if your plans change and you don't purchase a home?

• Transfer to RRSP: You can transfer your FHSA balance to your RRSP without affecting your RRSP contribution room. Nothing is lost.
• Account lifespan: The FHSA can remain open for 15 years or until you turn 71, whichever comes first.
• Taxable withdrawal: If you withdraw without buying a qualifying home, the withdrawal becomes taxable income—like a regular RRSP withdrawal.

The FHSA is designed for homebuying, but it's not an all-or-nothing bet. If your plans change, you have options.

Gift Funds Documentation

Receiving a gift from family toward your down payment is generous—and more common than you might think. But lenders have specific documentation requirements to verify the funds are truly a gift with no repayment expected.

Getting this documentation right avoids delays and last-minute scrambling.

What Your Lender Requires

For gift funds to be accepted as part of your down payment, you'll need to provide three things:

1. A Gift Letter

A signed letter from the donor stating:

• Their full name and relationship to you
• The exact gift amount
• That no repayment is required or expected—now or in the future
• Their signature and the date

2. Proof of the Donor's Funds

Bank statements from the donor showing they have (or had) the funds available to give. Lenders typically want to see 90 days of history, though requirements vary.

3. Proof of Transfer

Documentation showing the money moved from the donor's account to yours. This creates a clear paper trail—bank statements on both ends showing the matching transaction.

Gift Letter Template

Your family member can use this template:

Who Can Give a Gift?

Lenders typically accept gifts from immediate family:

• Parents and grandparents
• Siblings
• In some cases, aunts, uncles, or other close relatives (lender policies vary)

Timing Considerations

When 90 days isn't possible (and often it isn't), you'll need the complete paper trail:

• Gift letter
• Donor's bank statement showing the withdrawal
• Your bank statement showing the deposit

Documentation Checklist

Common Issues to Avoid

Incomplete gift letter: Make sure the letter explicitly states no repayment is expected. Vague language can cause delays.

Missing paper trail: If the gift moves through multiple accounts before reaching you, document each step.

Last-minute gifts: While not impossible to document, gifts received close to closing require more work. The earlier, the better.

Unexplained deposits: Any large deposit in your accounts will be questioned. If you received the gift months ago but didn't document it at the time, you'll need to reconstruct the paper trail.

Talk to Your Broker Early

If you're receiving a gift as part of your down payment, let your broker know early in the process. They can tell you exactly what your specific lender will require and help you avoid documentation issues that could delay your closing.

Personal Savings Documentation

Using your own savings for a down payment is the most straightforward source—but lenders still need to verify where the money came from. Here's what to expect and how to prepare.

What Lenders Need to See

For funds you've saved yourself, the documentation is relatively simple:

The 90-Day Statement

Lenders want to see that your down payment funds have been sitting in your accounts—"seasoned"—for at least 90 days. This shows the money is legitimately yours and didn't just appear from an unexplained source.

You'll need statements from every account that holds part of your down payment:

• Chequing accounts
• Savings accounts
• High-interest savings accounts
• Joint accounts (if applicable)

Large Deposits: Be Ready to Explain

Any deposit that isn't a regular paycheque will likely be questioned. Lenders aren't being nosy—they're required to verify the source of all funds.

Common large deposits and what you'll need:

Transfers Between Your Own Accounts

If you've been consolidating funds from multiple accounts, make sure you can show the trail:

1. Statement from source account showing the withdrawal
2. Statement from destination account showing the deposit
3. Matching amounts and dates on both statements

Moving money between your own accounts isn't a problem—but the lender needs to see it's actually your money moving, not new funds appearing from nowhere.

Joint Accounts

If you're using funds from a joint account (with a spouse, partner, or family member):

• Both account holders may need to provide identification
• If the other person isn't on the mortgage, you may need a letter confirming the funds are available for your use
• Gift letter rules apply if the other person is gifting their portion

Keeping Your Accounts Clean

In the months leading up to your purchase:

The cleaner your banking history, the faster your approval will proceed.

What If Your Savings Are in a TFSA?

Funds in a Tax-Free Savings Account are still your savings—the TFSA is just the account type. You can withdraw from your TFSA at any time without tax consequences.

For documentation purposes, treat TFSA withdrawals like any other account transfer:

• Statement from TFSA showing the withdrawal
• Statement from your chequing/savings account showing the deposit

Talk to Your Broker

If you have any unusual transactions in your account history, let your broker know early. They can advise on what documentation you'll need and whether anything might cause issues with your specific lender.

Using a HELOC or Line of Credit

If you have equity in an existing property, you may be able to use a Home Equity Line of Credit (HELOC) to fund part of your down payment on a new purchase. This is a legitimate strategy, but it comes with important considerations.

How It Works

A HELOC lets you borrow against the equity you've built in a property you already own. You can draw from this line of credit and use the funds as part of your down payment on a new home.

Lender Considerations

Here's the critical point: borrowed funds for a down payment affect your debt ratios.

When you use a HELOC for your down payment, lenders will:

1. Count the HELOC payment in your Total Debt Service (TDS) ratio
2. Factor in the borrowed amount when assessing your overall leverage
3. Verify the HELOC is in good standing and has available room

How Lenders Calculate HELOC Payments

Even if your HELOC is interest-only, most lenders will calculate a notional payment for qualification purposes—typically 3% of the outstanding balance annually, or the actual payment if higher.

Example: A $50,000 HELOC draw would add approximately $125/month to your debt calculations, even if your actual interest-only payment is lower.

Documentation Required

Timing the Draw

Before your purchase closes:

1. Confirm your HELOC has sufficient available credit
2. Arrange the advance with your lender (1-5 business days typically)
3. Transfer funds to your chequing account
4. Provide statements showing the transfer to your mortgage broker

The Buy-Before-Sell Scenario

If you're using HELOC funds as bridge financing while you sell your current home:

The Plan

1. Draw from HELOC for new home down payment
2. Close on new home
3. Sell current home
4. Pay off HELOC from sale proceeds

What Lenders Consider

• Can you carry both properties simultaneously?
• What if your current home doesn't sell quickly?
• Is your HELOC limit sufficient?
• What's your contingency if prices drop?

Alternatives to Consider

Before committing to a HELOC strategy, discuss these alternatives with your broker:

Bridge financing: Some lenders offer short-term bridge loans specifically designed for the buy-before-sell scenario. These may be simpler than a HELOC draw.

Conditional sale: Making your purchase conditional on the sale of your current home. Less risky, but may weaken your offer in competitive markets.

Longer closing date: Negotiating a closing date that gives you time to sell your current home first.

Tax Considerations

Interest on a HELOC used for a personal residence down payment is not tax-deductible. This is personal borrowing, not investment borrowing.

However, if you're purchasing a rental property, the interest may be deductible. Consult with a tax professional about your specific situation.

Is This Strategy Right for You?

Using borrowed funds for a down payment can work well in the right circumstances, but it's not without risk. Consider:

Next Steps

This strategy requires careful planning. Talk to your broker about:

1. Whether using HELOC funds will work with your debt ratios
2. How much you can realistically draw
3. The impact on your qualification for the new mortgage
4. Alternative approaches that might work better

Using Proceeds from a Property Sale

If you're selling an existing property to fund your new home purchase, the proceeds from that sale can form part or all of your down payment. This is common for move-up buyers, downsizers, and anyone transitioning between homes.

The key challenge: timing. Your sale proceeds won't be available until your current home closes, but you may need to commit to your new purchase before then.

How Sale Proceeds Work

When your current home sells, the proceeds flow like this:

1. Sale price received from buyer
2. Minus your outstanding mortgage balance
3. Minus real estate commissions
4. Minus legal fees and adjustments
5. Equals your net proceeds

The Timing Challenge

Scenario 1: Sell First, Then Buy

The safest approach. You sell your current home, close, receive proceeds, then shop for your new home with cash in hand.

Pros:

• No financing uncertainty
• Know exactly how much you have
• Stronger negotiating position

Cons:

• May need temporary housing between homes
• Could be buying in a different market than when you sold
• Pressure to find something quickly

Scenario 2: Buy and Sell Simultaneously

Coordinate closing dates so you sell and buy on the same day (or within days).

Pros:

• One move, no temporary housing
• Proceeds flow directly to new purchase

Cons:

• Complex coordination
• Risk if either transaction falls through
• Stressful timing

Scenario 3: Buy First, Then Sell

Purchase your new home before your current home sells. Requires bridge financing or the ability to carry both properties.

Pros:

• Move at your own pace
• No temporary housing
• Can stage empty home for sale

Cons:

• Need to qualify carrying both properties
• Bridge financing costs
• Risk if current home doesn't sell quickly

Documentation Required

If Your Home Is Already Sold

The lender will want to see:

• Firm (unconditional) Agreement of Purchase and Sale
• Closing date
• Estimated net proceeds from your lawyer

If Your Home Is Listed But Not Sold

Using "anticipated proceeds" from an unsold property is more complex:

• Lender may require an appraisal to estimate value
• May only credit a percentage of anticipated equity
• Creates uncertainty in your application

Coordinating Closing Dates

If you're buying and selling simultaneously:

Your lawyers will coordinate the fund transfers, but you need to ensure there's enough time in the day for the money to flow from one transaction to the other.

When Timing Doesn't Line Up

If your sale closes after your purchase:

Bridge Financing

A short-term loan that "bridges" the gap between your purchase and your sale. The bridge loan provides funds for your down payment, then gets repaid when your sale closes.

Typical terms:

• Duration: Days to a few months
• Interest: Higher than mortgage rates (often prime + 2-4%)
• Fees: Setup fees, legal fees
• Security: Your current property (the one being sold)

Capital Gains Considerations

If the property you're selling is your principal residence, the sale is typically tax-free under the principal residence exemption.

If it's not your principal residence (investment property, cottage, rental):

• Capital gains tax will apply
• Factor this into your net proceeds calculation
• Consult a tax professional before assuming how much you'll have available

The Flow of Funds

On a typical coordinated closing:

Morning (Your Sale):

1. Your buyer's funds arrive at your lawyer's office
2. Your lawyer pays off your mortgage
3. Your lawyer deducts commissions and fees
4. Net proceeds held in trust

Afternoon (Your Purchase):

1. Your sale proceeds transferred to your purchase lawyer
2. Combined with your new mortgage funds
3. Full purchase amount sent to seller's lawyer
4. You receive keys to new home

Planning Your Timeline

For a smooth transaction using sale proceeds:

Talk to Your Team

Coordinating a sale and purchase requires your broker, realtor, and lawyer all working together. Let everyone know your plans early.

Liquidating Investments for Your Down Payment

If part of your down payment is coming from non-registered investment accounts—stocks, bonds, mutual funds, ETFs, or other securities—you'll need to sell those investments and document the proceeds for your lender.

What Counts as "Investments"?

This section covers non-registered (taxable) investment accounts:

• Brokerage accounts
• Investment accounts at banks
• Stocks, bonds, mutual funds, ETFs
• GICs (non-registered)
• Cryptocurrency holdings

Documentation Required

The lender needs to see:

1. You owned the investments
2. You sold them
3. The proceeds arrived in your bank account
4. There's a clear paper trail

The Liquidation Process

Step 1: Decide What to Sell

Consider which investments to liquidate based on:

• Current gains or losses (tax implications)
• Ease of selling (liquid vs. illiquid)
• Your ongoing investment strategy

Step 2: Execute the Sales

• Stocks, ETFs: Sell during market hours; settles in 1-2 business days (T+1)
• Mutual funds: Sell requests processed at end-of-day NAV; settles in 1-3 business days
• GICs: May have penalties for early redemption; check terms
• Bonds: Liquidity varies; may need to sell at market price

Step 3: Transfer to Your Bank Account

Once sales settle, transfer the cash to your regular bank account:

• Electronic transfer: 1-3 business days typically
• Keep records of the transfer request and confirmation

Step 4: Document Everything

Save:

• Account statements showing holdings before sale
• Trade confirmations for each sale
• Account statements showing cash balance after sale
• Transfer records to your bank
• Bank statements showing funds received

Capital Gains Tax Implications

When you sell investments in a non-registered account, capital gains tax may apply.

Plan for this:

• Don't count on 100% of sale proceeds if you have gains
• Consider selling losing positions to offset gains
• Consult a tax professional if amounts are significant

Settlement Timing

Build in buffer time for:

Cryptocurrency Considerations

If part of your down payment is coming from cryptocurrency:

Investment Account Types and Access

Talk to Your Broker

If a significant portion of your down payment is coming from investments, let your broker know early. They can advise on:

• What documentation your specific lender will require
• Whether the timeline works for your closing
• Any concerns about fund sourcing

Finding Your Home

The relationship between homebuyers and real estate agents can be complicated. Some buyers feel they're getting tremendous value—a trusted advisor who guides them through a complex process. Others feel like they're paying a lot for someone who mostly opens doors and fills out forms.

The truth depends heavily on the agent and the market. Let's talk about what you should actually expect.

What a Buyer's Agent Actually Does

A good buyer's agent does more than show you listings you could find yourself online. Here's the value they should be providing:

Market knowledge and pricing context. When you see a home listed at $749,000, is that a realistic price or a strategy to generate multiple offers? An experienced agent knows how similar properties have sold, what the competition looks like, and whether that price reflects the market or a seller's wishful thinking.

Access beyond public listings. Some properties are marketed quietly before hitting the public sites—"coming soon" listings, pocket listings, or homes where the seller wants to test the market. Agents often hear about these before you would.

Offer strategy. When it's time to make an offer, an experienced agent helps you structure it effectively. Not just the price, but the deposit amount, the conditions, the closing date, the irrevocability period—all of these affect how your offer is perceived.

Negotiation. If there's a counteroffer, or if the inspection reveals issues, your agent negotiates on your behalf. This is harder than it looks, and the stakes are high.

Coordination. A lot happens between an accepted offer and closing day. Your agent keeps things moving—following up on conditions, coordinating with the listing agent, making sure deadlines aren't missed.

Problem-solving. Things go wrong. The inspection finds a cracked foundation. The appraisal comes in low. The seller wants to change the closing date. An experienced agent has seen these situations before and knows how to navigate them.

Your Realtor

When you find a property you're serious about, your realtor and broker will work together to make sure the financing and the offer are aligned.

Questions Worth Asking

Before you dive into serious house hunting, it's worth having a conversation with your agent about how they work:

• How many buyers are you currently working with?
• How quickly can you typically arrange viewings?
• What's your approach when there are multiple offers?
• How do you help me decide what to offer?
• What happens if we disagree on strategy?

These questions aren't about testing your agent—they're about understanding how you'll work together.

Signing a Buyer Representation Agreement

At some point—usually before you start viewing properties seriously—your agent will ask you to sign a Buyer Representation Agreement. This is standard practice.

The agreement formalizes the relationship: your agent commits to working in your best interest, and you commit to working with them exclusively for a defined period. It also outlines how compensation works.

The Search Process

With your pre-approval in hand and your team assembled, the actual search begins. A few things to keep in mind:

Set Up Alerts

Your agent can set up automated searches so new listings matching your criteria hit your inbox immediately. In a fast-moving market, seeing a property on day one gives you more options than seeing it on day five.

View with Purpose

Early in the search, you might view lots of properties to calibrate your expectations. As you narrow in, each viewing should be about serious candidates.

Take Notes

After a few viewings, they start to blur together. Photos, notes, even voice memos can help you remember what you liked and what you didn't.

The Emotional Reality

You will lose out on properties. You'll fall in love with a place and get outbid, or the inspection will reveal a dealbreaker, or something else will go sideways. This is emotionally hard, but it's normal.

Different Markets, Different Strategies

Next Steps

Once you find a property you want to pursue, the next step is making an offer. This is where the process gets serious—and where understanding conditions, deposits, and negotiation strategy really matters.

Let's break that down.

Making an Offer

This is where the stress often peaks. Multiple offers, pressure to waive conditions, fear of losing "the one"—it can feel like you're gambling with your financial future.

It doesn't have to feel that way. Let's break down what you can control, what the real risks are, and how to make informed decisions when the stakes are high.

The Anatomy of an Offer

When you're ready to make an offer, your realtor will prepare an Agreement of Purchase and Sale. Here's what goes into it:

Purchase price. What you're offering to pay. This might be at, above, or below the asking price depending on market conditions and competition.

Deposit. A good-faith payment that shows you're serious. Typically 3-5% of the purchase price, though this varies by market. The deposit is held in trust and credited toward your purchase—you don't lose it unless you back out without a valid reason.

Conditions. Clauses that let you exit the deal if certain things don't go as planned. More on these below—they're critical.

Inclusions and exclusions. What's included in the sale (appliances, light fixtures, window coverings) and what isn't. Get this in writing.

Closing date. When ownership transfers and you get the keys. This needs to work for both you and the seller.

Irrevocability period. How long your offer stays open for the seller to accept or counter. Usually 24-48 hours.

Understanding Conditions

Conditions are your protection. They give you a way out of the deal if something goes wrong—without losing your deposit.

Financing Condition

What it protects: Your ability to walk away if your mortgage financing falls through.

Even with a pre-approval, your final mortgage approval depends on the lender approving the specific property. If the lender says no—maybe the property doesn't meet their criteria, or something changed in your financial situation—the financing condition lets you exit.

Typical duration: 5-10 business days

Inspection Condition

What it protects: Discovery of major defects you couldn't reasonably have known about.

A professional home inspection typically costs $400-700 and takes 2-3 hours. The inspector examines the roof, foundation, electrical, plumbing, HVAC, structure—everything. If they find something serious (a failing foundation, knob-and-tube wiring, active water damage), the inspection condition lets you walk away or negotiate repairs.

Typical duration: 5-10 business days

The waiver pressure: In competitive markets, sellers often prefer offers without inspection conditions because they close faster and with less uncertainty. Buyers who waive inspections take on real risk.

Appraisal Condition

What it protects: The home being worth what you're paying for it.

Your lender will have the property appraised before finalizing your mortgage. If the appraisal comes in lower than your purchase price, there's a gap. Without an appraisal condition, you'd need to cover that gap in cash—or renegotiate, if the seller is willing.

When it matters most: If you're bidding significantly over asking, there's a higher chance the appraisal won't match your offer.

Should You Waive Conditions?

This is one of the highest-stakes decisions you'll make. There's no universally right answer—it depends on your risk tolerance, your financial cushion, and how badly you want the property.

A Decision Framework

Rather than telling you what to do, here are the questions to ask yourself:

Some buyers accept more risk to win in competitive situations. Others prioritize protection over winning. Both approaches are valid. What matters is that you're making a conscious choice, not a panicked one.

The Offer Process

When you've found a property you want to pursue:

Step 1: Your Realtor Pulls Comparables

Before deciding on a price, your agent will show you what similar properties have sold for recently. This gives you a data-driven foundation for your offer.

Step 2: You Discuss Strategy

Price, conditions, closing date, deposit—you and your agent work through each element. If there are multiple offers expected, you'll discuss how to position yourself competitively.

Step 3: Your Agent Drafts the Agreement

This is the formal offer document. Review it carefully before signing. Ask about anything you don't understand.

Step 4: You Sign and Submit

Your signature goes on the offer. Your agent submits it to the listing agent.

Step 5: You Wait

The seller can accept, reject, or counter. If there are multiple offers, they may ask for "best and final" offers from all interested buyers.

Step 6: Acceptance (or Not)

If your offer is accepted, congratulations—you have a deal. Your deposit is due (usually within 24 hours), and the clock starts on any conditions.

If your offer isn't accepted, you regroup and continue the search.

After Acceptance

Once your offer is accepted, you're in the conditional period (if you have conditions) or heading straight to closing preparation.

For buyers with conditions, the next few days involve:

Your realtor and broker will guide you through each step. The key is to stay on top of timelines—condition deadlines are firm.

Next Steps

With an accepted offer and conditions satisfied, you're heading toward closing. The next sections cover the remaining decisions and preparations:

• Mortgage Decisions — Finalizing your rate, term, and payment options
• Closing Costs — Exactly what you'll pay and when
• Closing Day — What to expect and how to prepare

Mortgage Decisions

Fixed or variable? 25 or 30-year amortization? Weekly or monthly payments? These decisions feel high-stakes because small differences compound over years and hundreds of thousands of dollars.

Here's the truth: there's no universally "right" answer. What matters is finding the choice that fits how you think about money, how you handle uncertainty, and what trade-offs you're comfortable making.

Let's give you a framework to decide.

Fixed vs. Variable: The Core Trade-off

This is the decision that keeps buyers up at night. Both options have real advantages, and neither is objectively better.

Fixed Rate

Your interest rate is locked for the entire term (typically five years). Your payment amount is identical every month, no matter what happens in the broader economy.

• You pay a premium for this certainty—fixed rates are usually higher than variable rates at the time of signing
• You're protected if rates rise during your term
• You may feel like you "lost" if rates drop significantly after you lock in
• Best for: people who value predictability and would lose sleep over payment fluctuations

Variable Rate

Your rate moves with the Bank of Canada's overnight rate. When the central bank raises or lowers rates, your rate adjusts accordingly.

• Historically, variable rates have cost borrowers less over time—but not always, and not in every period
• Your payment may change during your term, or (with some lenders) your payment stays fixed but the proportion going to interest vs. principal shifts
• You can usually convert to fixed mid-term if you get nervous
• Best for: people comfortable with some uncertainty who believe rates are likely to hold steady or decline

A Decision Framework

Rather than asking "which is better," ask yourself these questions:

Neither choice is reckless. Both are legitimate strategies used by financially sophisticated buyers. The question is which one lets you sleep at night.

Term Length: Why Five Years Is Standard

The "term" is how long your rate and conditions are locked in before you renegotiate. It's separate from amortization (which we'll cover next).

Most Canadians choose a five-year term because:

• Lenders offer their best rates on five-year products
• It's long enough to provide stability but short enough to adjust if your life changes
• Breaking a shorter-term mortgage early often has steeper penalties

Shorter terms (1-3 years) make sense if you have strong conviction that rates will be significantly lower soon, or if you know you'll be selling or refinancing within that window. But you'll typically pay a slightly higher rate for the flexibility.

For most buyers, the five-year term is the sensible default unless you have a specific reason to choose otherwise.

Amortization: How Long to Pay Off Your Mortgage

Amortization is the total length of time to pay off your mortgage. It affects your monthly payment amount and how much interest you'll pay over the life of the loan.

25-Year Amortization

The standard for insured mortgages. Higher monthly payments, but you build equity faster and pay significantly less interest overall.

30-Year Amortization

Lower monthly payments, but you'll pay more interest over time and build equity more slowly.

The Payment Difference

The trade-off is real: Lower payments now vs. more interest over time. If cash flow is tight, the 30-year option gives you breathing room. If you can comfortably afford the 25-year payment, you'll come out ahead financially in the long run.

Payment Frequency: Small Optimizations

How often you make payments affects how quickly you pay down your mortgage:

The "accelerated" options are where the real savings happen. Accelerated bi-weekly can shave 2-3 years off a 25-year mortgage and save tens of thousands in interest—without dramatically changing your budget.

If your income arrives bi-weekly, matching your mortgage payments to your pay schedule also makes budgeting easier.

Pre-Payment Privileges

Most mortgages allow you to pay extra without penalty, up to certain limits. Common privileges include:

• Lump sum payments: Typically 10-20% of the original principal per year
• Payment increases: Increase your regular payment by 10-20% per year
• Double-up payments: Make an extra payment equal to your regular payment

These privileges let you pay off your mortgage faster when you have extra cash—a bonus, a tax refund, an inheritance. Over time, strategic use of pre-payment privileges can save you tens of thousands in interest.

Your Broker Is Your Guide Here

These decisions don't have to be made alone, and they don't have to be made today.

Your broker can walk you through the specific rate options available for your situation. Current market conditions, your financial profile, and the lenders available to you all factor into the best choice.

When you're ready to discuss specifics, that's a conversation worth having. For now, the goal is simply to understand the landscape—so when you do make these decisions, they feel like informed choices rather than guesses.

Closing Costs

Beyond your down payment, there's a set of additional costs you'll need to pay to close your purchase. These catch many first-time buyers off guard—not because they're hidden, but because nobody explained them clearly until now.

The rule of thumb is 1.5% to 4% of the purchase price, depending on your province. Let's break down exactly what you're looking at.

Your Estimated Closing Costs

Other Closing Costs

Beyond property transfer tax, expect these costs:

Legal Fees ($1,500 – $2,500)

Your real estate lawyer handles the legal transfer of property. This includes:

• Reviewing the purchase contract
• Conducting title searches
• Preparing and registering documents
• Coordinating the transfer of funds
• Providing you with a reporting letter after closing

Title Insurance ($300 – $500)

Protects you against problems with the property's title that weren't discovered during the title search: unknown liens, encroachments, forgery, or errors in public records. It's a one-time premium, not an ongoing cost.

Home Inspection ($400 – $700)

If you haven't already done this during your conditional period, budget for an inspection before closing. Even without a condition, knowing what you're buying is worth the cost.

Appraisal ($0 – $500)

Confirms the property's value for your lender. Some lenders cover this cost; others pass it through to you. Your broker can tell you what to expect.

Property Insurance (First Premium)

Required before closing—your lender won't release the mortgage funds without proof of insurance. Budget for your first premium payment.

Property Tax Adjustment

Reimburses the seller for property taxes they've already paid that cover the period after you take ownership. If the seller paid taxes through December but you close November 1, you owe them for November and December.

Moving Costs ($1,000 – $5,000)

Often forgotten in the budget. Professional movers, truck rental, packing supplies, and potentially cleaning services at both ends.

Cash to Close: The Full Picture

This doesn't include moving costs or any immediate purchases for your new home. Having a buffer beyond the minimum is always wise.

How You'll Know the Exact Amount

A few days before closing, your lawyer will send you a Statement of Adjustments. This document shows the final calculation: purchase price, adjustments for taxes and fees, credits, and the exact amount you need to bring to close.

The statement eliminates guesswork. Until you receive it, the estimates above are your working numbers. Once you have the statement, you'll know to the dollar what's required.

Payment Methods

Your lawyer will tell you exactly how to deliver the funds:

• Certified cheque made out to your lawyer's trust account
• Bank draft made out to your lawyer's trust account
• Wire transfer to your lawyer's trust account

Understanding Condo Ownership

Here's what you need to know.

What You're Actually Buying

When you purchase a condo, you're buying three things:

You're not just buying real estate. You're joining an organization that will affect your finances and daily life for as long as you own the property.

Critical Documents to Review

Monthly Fees: What They Cover

Usually included:

• Building insurance (the structure, not your contents—you need your own insurance)
• Common area maintenance and cleaning
• Landscaping and grounds keeping
• Elevator maintenance
• Reserve fund contributions
• Some utilities (varies—check what's included)

Usually NOT included:

• Your personal contents insurance
• Repairs inside your unit
• Your mortgage or property taxes
• Utilities billed directly to your unit

Special Assessments: The Risk You Need to Understand

Think: building envelope repairs, a new roof, elevator replacement, underground parking membrane, or unexpected structural issues.

How to Assess Your Risk

No building is risk-free. But understanding what you're walking into lets you make an informed decision—and factor potential assessments into your financial planning.

Your Rights and Responsibilities

As a condo owner, you'll have the right to:

• Vote at general meetings
• Run for the board/council
• Access corporation records and documents
• Challenge decisions through proper channels

And the responsibility to:

• Pay your fees on time
• Follow the bylaws and rules
• Get approval for certain renovations or changes
• Maintain your unit appropriately

Living in a condo means accepting some constraints in exchange for shared costs and amenities. For most condo owners, it's a reasonable trade-off—as long as the building is well-managed.

Questions to Ask

Before committing to a condo purchase:

Your realtor can help you get answers, and the status certificate / strata documents should provide documentation.

Closing Day

The days leading up to closing can feel tense. After months of searching, weeks of paperwork, and the emotional highs and lows of the offer process, it's natural to worry something will go wrong at the last minute.

Here's exactly what happens in the final stretch—and what you need to do.

The Week Before Closing

A lot is happening behind the scenes, even if you don't see it.

Your lender finalizes the mortgage. They're completing their review, confirming all conditions are satisfied, and preparing the mortgage instructions for your lawyer.

Your lawyer prepares. They're conducting a final title search to ensure nothing has changed since the offer was accepted, preparing the transfer documents, and calculating the final Statement of Adjustments.

The mortgage funds are arranged. Your lender coordinates with your lawyer to ensure funds will be available on closing day.

You may feel like you're just waiting—but the machinery is moving.

Your Closing Checklist

1-2 Weeks Before Closing

Property Insurance

Your lender requires proof of home insurance before they'll release the mortgage funds. Contact an insurance broker and have a policy ready to go. They'll need the property address, closing date, and mortgage details.

Final Walkthrough

This is your chance to verify the property is in the condition you expect—same as when you made your offer, all agreed-upon items included, nothing damaged. Your realtor will arrange this, typically a day or two before closing.

Utilities

2-3 Days Before Closing

Statement of Adjustments

Your lawyer sends this document showing the final purchase calculation: purchase price, credits, debits, adjustments for property tax and condo fees, and the exact amount you need to bring.

Review it carefully. If anything looks wrong, call your lawyer immediately.

Arrange Your Funds

Based on the Statement of Adjustments, get a certified cheque or bank draft made out to your lawyer's trust account—or arrange a wire transfer.

Signing Appointment

Your lawyer will arrange a time for you to sign the mortgage commitment, property transfer, and various other documents. This may be in person at their office or done remotely through secure signing platforms.

Closing Day

What Your Lawyer Does

Your lawyer handles all the legal mechanics of closing:

• Reviewing the purchase contract and ensuring all conditions were met
• Conducting title searches to confirm the seller can legally sell
• Preparing the mortgage documents per your lender's instructions
• Calculating adjustments (property tax, condo fees, utilities)
• Holding funds in trust and disbursing them on closing
• Registering the transfer and mortgage with the Land Title Office
• Providing you with a reporting letter summarizing everything after closing

You don't need to manage any of this directly—that's what you're paying legal fees for. Your job is to sign what needs signing and deliver the funds when asked.

The Flow of Funds on Closing Day

Here's what happens:

What Can Go Wrong (and How to Prevent It)

Most closings go smoothly. The issues that arise are usually minor and solvable. But having everything in order reduces the chance of last-minute scrambling.

Your Closing Contacts

Keep these contacts handy in the final days. If anything seems off or you have questions, reach out.

After the Keys

Congratulations—you're a homeowner.

Take a moment to appreciate what you've accomplished. Then:

The hard part is done. Now you get to make it home.

What Comes After Closing

Your broker and realtor remain available if questions come up. Home ownership is a journey, and you have a team to support you along the way.

Your Team

You're not doing this alone. Buying a home involves a team of professionals, each handling a specific part of the process. Here's who's in your corner and how to reach them.

Your Mortgage Broker

Your broker is your guide through the financing side of this purchase. They've already helped you understand what you can afford, and they'll continue to be your point of contact for:

• Answering questions about your mortgage options
• Finding the best rate and terms for your situation
• Coordinating with the lender through to closing
• Helping you understand any paperwork along the way

Your Realtor

Your realtor is your guide through the property side. They'll help you:

• Find homes that match what you're looking for
• Understand what properties are actually worth in today's market
• Structure and negotiate your offer
• Coordinate the steps from accepted offer to closing day

When you find a property you're serious about, your realtor and broker will work together to make sure the financing and the offer are aligned.

Other Professionals You'll Work With

As you move through the process, you'll also connect with:

Real Estate Lawyer

Handles the legal transfer of property, reviews contracts, and ensures the title is clear. Your broker or realtor can recommend someone if you don't have a lawyer in mind.

Home Inspector

Evaluates the property's condition before you commit. Worth every dollar, even in competitive markets. A thorough inspection takes 2-3 hours and covers structure, roof, electrical, plumbing, HVAC, and more.

Appraiser

Confirms the property's value for your lender. This is typically arranged by your lender, not something you need to coordinate yourself.

Insurance Broker

You'll need home insurance in place before closing. Start looking into this 2-3 weeks before your closing date. The insurance broker will need the property address, closing date, and details about the home.

A Note on Communication

Throughout this process, you may hear from your broker, your realtor, your lawyer, and others—sometimes all in the same day. It can feel like a lot.

If you're ever unsure who to ask about what:

And if you're just feeling overwhelmed, any of them can help point you in the right direction. That's what they're here for.

Using This Guide

This guide was created by your broker to walk you through the homebuying process using your specific numbers and situation. It's designed to be a reference you can return to as questions come up.

Your team is here to support you through one of the biggest decisions you'll make. Don't hesitate to reach out when you need guidance.