First-Time Home Buyer Checklist: Buying Your First Home in Canada

Purchasing your first home is one of the biggest financial and life decisions many people make. In Canada, buying a house can feel complicated, from assessing affordability and saving a down payment, to finding a property, negotiating a deal, and finalizing legal paperwork. Having a clear checklist helps first-time homebuyers stay organised and avoid common pitfalls.

Not everyone who wants to own a home is immediately ready: low credit, limited savings, or unstable income can delay traditional mortgage approval. For those buyers, rent-to-own arrangements offer an alternative path, allowing you to rent while working toward home ownership.

In this checklist for first time home buyers, you’ll find both traditional homebuying steps and a deep look at rent-to-own, including how it works, what to watch out for, and why it can be a viable option.

Key takeaways

Buying your first home requires more than just income: you need savings, good credit history, and knowledge of hidden costs.
Alternatives to traditional mortgages, such as rent-to-own, can help first-time buyers bridge the gap when they aren’t yet able to qualify for a mortgage.
Working with professionals (mortgage lenders, realtors, lawyers) and doing due diligence at every step reduces risk and ensures a smoother process.
Even after moving in, homeownership involves ongoing responsibilities: maintenance, budgeting, and adapting to the cost of home ownership.

1. Assess your financial readiness

Before you even think about browsing listings, the first step is to get a realistic sense of what you can afford.

Review income, debt and credit score

Check your total income and monthly expenses. A stable job and reliable income history make mortgage approval easier.

Add up all your debt (student loans, car payments, credit cards, lines of credit). Lenders use debt-service ratios to gauge affordability. In Canada, gross debt service (GDS) and total debt service (TDS) ratios help determine how much mortgage you can handle.

Pull your credit report and check your score. A healthy credit history, ideally with no major late payments or collections, increases your chances of favourable mortgage rates and approval.

If you’re buying a home as a newcomer in Canada, some lenders offer special mortgage programs tailored to recent immigrants or permanent residents. These may accept international credit history, alternative income documentation, or require a higher down payment. Still, it’s a good idea to start building Canadian credit early and understand how local lending rules apply to your situation.

Estimate how much home you can afford

Factor in more than just the price of the home:

Down payment
Closing costs (legal fees, land transfer taxes, home inspection, appraisal)
Ongoing expenses (property taxes, utilities, maintenance, insurance)
Contingency funds (unexpected repairs or emergencies)

Be conservative. A home that feels “barely affordable” now may become a burden if interest rates rise or your financial situation changes.

Read questions to ask yourself before buying a house

Consider rent-to-own as an alternative

For buyers who are not yet ready to qualify for a mortgage, perhaps due to low credit, lack of down payment, or uncertain income, rent-to-own can be a viable, flexible path to homeownership.

Rent-to-own (also called lease-to-own) involves renting a property with the option (but not always the obligation) to purchase it later. Under this arrangement:

You sign a lease agreement, often combined with an “option-to-purchase” agreement.
You typically pay an upfront option fee or deposit — often 2–5% of the agreed purchase price. This fee may be credited toward your down payment if you decide to buy.
A portion of your monthly rent (rent credit) may be set aside toward the eventual down payment or purchase price.
The agreement locks in a purchase price at the start — giving you time (1–5 years is common) to build savings and/or improve credit.
If, at the end of the lease‑option period, you qualify for a mortgage and choose to buy, you exercise the option, apply the option fee and rent credits toward your down payment, and complete a traditional home purchase.

2. Save for your down payment

In Canada, conventional mortgage guidelines generally require a minimum down payment, depending on the home’s purchase price and type.

Minimum down payment guidelines

For homes under $500,000, a minimum of 5% is typical
For higher-priced homes, larger down payments may be required
Saving 20% or more can reduce mortgage insurance costs and give you more equity from day one

Effective ways to save for a down payment

Use tax-advantaged accounts such as a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) (for first-time buyers, programs like the Home Buyers’ Plan may apply)
Automate savings with a standing order to a dedicated “house fund”, treat it as non-discretionary, like a bill
Reduce non-essential expenses and track spending. Small sacrifices now can add up over time.

Read more about tips for saving for a down payment

Government incentives and programs

Depending on your province, first-time homebuyer incentives, grants, or tax advantages may be available. Federal programs like the First-Time Home Buyer Incentive and the Home Buyers’ Plan (HBP) can boost your down-payment ability or reduce your borrowing needs. Be sure to also check for any provincial or municipal programs that may reduce closing costs or offer rebates.

3. Get mortgage pre-approval

Once you have an idea of what you can afford and how much you’ve saved, the next step is to approach a lender for pre-approval.

Why mortgage pre-approval matters

Gives you a clear idea of how much you can borrow
Signals to sellers that you’re a serious buyer
Helps you budget more accurately (mortgage payments, interest rate, amortization period)

Fixed vs. variable rate mortgages

Fixed-rate: More stability—your payment remains the same even if interest rates rise
Variable-rate: Could start lower than fixed, but payments may fluctuate depending on market rates

Consider your comfort level with risk, long-term plans, and interest-rate forecasts before deciding

Deciding between a traditional mortgage and rent-to-own

Choosing between a straight home purchase and a rent-to-own agreement depends on your financial situation, risk tolerance, and future outlook. Here’s a comparison to help decide:

Factor	Traditional purchase	Rent-to-own (e.g. via Requity Homes)
Upfront cost	High (down payment, closing costs)	Lower (option fee/down payment + rent credits)
Ownership	Immediate equity and ownership	Rent + future potential ownership
Flexibility	Less flexibility — commitment to mortgage	Option to buy, or stay renting if you change your mind
Risk	Debt burden + market fluctuations	Risk of losing fees/credits if you don't buy
Time to prepare	Must be ready before purchase	Time to rebuild credit, save, or stabilize income
Stability	Long-term investment	Transitional — until you buy or move out

‍

If you’re financially ready and confident, buying outright may be simpler and ultimately cheaper. If you’re not, or want more flexibility, rent-to-own offers a useful alternative — but only if you go in with eyes wide open.

How mortgage or rent-to-own pre-approval affects your home search

With a pre-approval in hand, you can confidently browse properties within your budget. It also strengthens your position when making offers. Sellers are more likely to take you seriously compared with unqualified buyers.

Tip: Use this rent-to-own affordability calculator to see how much home you could afford through a rent-to-own program.

4. Define your needs and wants in a home

Before diving into listings, clarify what you really need, and what you want, in your first home.

Must-haves vs. nice-to-haves when buying a home

Create two lists:

Must-haves: essentials such as number of bedrooms, proximity to work or public transit, safety, structural soundness
Nice-to-haves: extra amenities such as a yard, finished basement, garage, open concept design

This helps focus your search and avoid being sidetracked by appealing but impractical features.

Long-term plans and resale value

Think about how long you plan to live in this home. If you anticipate moving within 5–10 years, consider resale value, neighbourhood development, commute times, and market trends.

Home search tools

Use multiple platforms to find properties: local MLS listings, real estate apps, direct contact with real estate agencies. Having pre-approval often unlocks better tools or assistance from realtors.

Browse homes for sale and homes for rent-to-own in Canada

5. Work with a licensed real estate agent

A real estate agent (also called a buyer’s agent) can add value, especially for first-time buyers.

Benefits of working with a buyer’s agent

Professional knowledge of the market and neighbourhoods
Help with paperwork, negotiations, and closing details
Access to listings before they reach public markets

What to ask when interviewing real estate agents

Years of experience, especially with first-time buyers
Knowledge of the area you’re interested in
Familiarity with rent-to-own or alternative funding methods (if that’s relevant for you)
Commission structure — who pays, how much, and under what conditions

6. Start house hunting

With a plan in place and a partner (agent), it’s time to start visiting properties.

Preparing for showings and open houses

Bring a checklist: structural integrity, wiring/plumbing, neighbourhood noise, nearby amenities, commute, etc.
Take photos, notes — comparing houses in your head is hard
Attend at different times of the day (morning, evening, weekend) to get a feel for traffic, light, and noise

Red flags to watch for

Visible damage (roof leaks, mould, cracks, sagging floors)
Inconsistent maintenance (peeling paint, outdated wiring)
Poor neighbourhood infrastructure (lack of transit, amenities, or safety concerns)

Evaluate the neighbourhood

Beyond the home itself, consider the community: schools (if needed), proximity to work, access to public transit, local parks, grocery stores, walkability, noise, and future development plans.

6. Making an offer a home

Once you find a suitable property, it's time to present an offer.

Conditional vs. firm offers

Conditional offer: Includes conditions such as home inspection, financing approval, sale of current home, etc. Common for first-time buyers, ensures safety net.
Firm offer: No conditions — riskier if there are unknowns (inspection, financing, unexpected issues)

What’s included in a standard home offer

Purchase price
Deposit amount (good-faith money)
Conditions (financing, inspection, closing date)
Inclusions/exclusions (appliances, fixtures)
Timelines for due diligence

Understanding deposit, conditions, and negotiation timelines

Deposit is typically held in trust — shows seriousness
Ensure conditions give you enough time to inspect, secure financing, and review legalities
Negotiation may involve back-and-forth — be prepared for counter-offers

7. Schedule a home inspection

Always get a home inspection. Never skip this step, even for new builds.

Why home inspections are important

Professional inspectors can identify structural, electrical, plumbing or foundation issues (things you may miss during your own walk-through)
Gives you leverage to renegotiate price, request repairs, or walk away

What to expect from a home inspection report

A detailed list of findings (major issues, maintenance recommendations, expected lifespan of components)
Helps you budget for immediate repairs or future maintenance

What to do if your home inspection reveals issues

Ask seller to repair major defects
Request price reduction or credits toward closing costs or repairs
If problems are severe, consider walking away (if offer was conditional)

8. Finalize your mortgage and paperwork

Once inspection is complete and conditions satisfied, you proceed to finalize the mortgage and legal paperwork.

Submitting documents to your lender

Provide proof of income, employment history, credit score, down payment funds, identification
Review the mortgage commitment letter carefully — confirm interest rate, amortization, monthly payment, payment schedule

Confirming insurance, title, and legal review

Hire a lawyer or notary to handle final sale paperwork, title transfer, registration
Arrange for property insurance — often required by lenders before closing

Coordinating with your lawyer or notary

Confirm closing date, funds transfer, registration of mortgage
Review statement of adjustments (prorated taxes/utilities, deposit credit, adjustments for occupancy)

9. Prepare for closing

Closing day involves final payments, paperwork, and the handover of keys.

Understanding the statement of adjustments

This document adjusts amounts already paid (like deposit, prepaid taxes, utilities) so buyer and seller settle fairly.

Paying closing costs and finalizing legal documents

These may include: remainder of down payment, legal fees, land transfer tax (if applicable), title insurance, lender fees, adjustments for property taxes or utilities.

Key handoff and move-in checklist

Ensure keys, garage openers, security codes are handed over
Check that utilities are transferred — electricity, water, heating, internet
Do a final walk-through to ensure the property is in agreed-upon condition

10. Post-purchase tasks

Owning a home brings new responsibilities.

Utilities, services and address change

Set up or transfer utilities (electricity, gas, water, internet, waste collection)
Update address for mail, banking, subscriptions, government agencies, insurance

Budgeting for maintenance, repairs and ongoing expenses

Create a maintenance schedule (seasonal inspections, HVAC, roof/gutter care, landscaping)
Build an emergency fund for unexpected repairs (e.g. furnace, plumbing, roof)
Plan for future upgrades (appliances, renovations, energy efficiency)

Own your homeownership path with our home buyer checklist

As we’ve seen in this checklist, buying your first home doesn’t always mean following the traditional mortgage-first route. Alternatives like rent-to-own homes offers a flexible way to get started if you're not yet mortgage-ready. You can live in your future home now while building credit and savings for a future purchase.

Whether you choose a conventional mortgage or a rent-to-own option, the most important step is finding a path that fits your financial situation and long-term goals. With the right plan, homeownership can become a reality, on your terms.

Want to see if rent-to-own fits your homeownership journey? Get pre-qualified with Requity Homes' rent-to-own program in minutes - it only takes a few minutes and there's no obligation to get started.

Frequently asked questions (FAQs) about the home-buying process

How to qualify for first time home buyer in Canada?

To qualify as a first-time homebuyer in Canada, you must not have owned a home in the past four years and must be purchasing a principal residence. You’ll also need to meet mortgage approval criteria, including income, credit score, and debt levels. Additional programs like the Home Buyers’ Plan and First Home Savings Account may have specific eligibility requirements.

How much do first time home buyers need to put down?

First-time buyers in Canada need a minimum down payment of 5% on homes priced up to $500,000. For homes between $500,000 and $999,999, it’s 5% on the first $500,000 and 10% on the remaining amount. For homes over $1 million, a 20% down payment is required.

What are the rules for a first time buyer?

To be considered a first-time buyer, you must not have owned a home or lived in a home owned by your spouse or common-law partner in the past four years. You must also intend to live in the home as your primary residence. This status may qualify you for programs like the First-Time Home Buyer Incentive, the Home Buyers’ Plan, and land transfer tax rebates.

What is the $10,000 tax credit for first time home buyers in Canada?

The $10,000 First-Time Home Buyers’ Tax Credit allows eligible buyers to claim a non-refundable tax credit of up to $1,500 (15% of $10,000) on their income tax return. To qualify, you must be a first-time buyer and the home must be your primary residence. You claim it using line 31270 of your tax return.

How much of a down payment do I need for $500,000?

For a $500,000 home in Canada, the minimum down payment is 5%, which equals $25,000. If you're putting down less than 20%, you’ll also need to pay for mortgage default insurance (CMHC insurance), which is added to your mortgage amount.