In this episode of Your Wealth Matters, Capstone Asset Management Portfolio Managers Janet Kim Sing and Maria Dawes share 10 essential tips for buying a home in Canada.
From getting pre-approved and understanding the mortgage stress test to budgeting beyond the list price and using first-time buyer incentives, the duo offers clear, practical advice. They highlight the value of working with mortgage brokers and local experts, and stress the importance of credit scores, home inspections, and knowing your down payment requirements.
Here’s a quick look at the 10 things to know before buying a home in Canada:
Get pre-approved for a mortgage
Understand the mortgage stress test
Budget beyond the home’s listing price
Check and strengthen your credit score
Research government home buyer programs
Choose between fixed and variable mortgage rates
Get familiar with your local housing market
Always get a home inspection
Organize your down payment and required documentation
Learn about first-time buyer benefits and rebates
Whether you're a first-time buyer or just need a refresher, this episode helps you approach homeownership with clarity and confidence.
With interest rates, housing prices, and affordability challenges in the spotlight, many Canadians are asking—what do you really need to know before buying a home?
In this episode of Your Wealth Matters, we break down 10 key things to consider before making one of the biggest financial decisions of your life. From mortgage pre-approvals and the stress test to government programs and down payment rules, our Portfolio Managers, Janet Kim Sing and Maria Dawes, share practical insights to help you navigate the home buying process with clarity and confidence.
Janet: Welcome to Your Wealth Matters! I’m Janet Kim Sing, Portfolio Manager at Capstone Asset Management, and today I’m joined by my colleague and Portfolio Manager on the Private Wealth Team, Maria Dawes.
Are you thinking of buying a home in Canada this year? Then you’re in the right place! We’re going to break down:
10 key things you need to know before you buy.
Maria: Okay, we have a lot to cover, so let’s get into it — and these are in no particular order, as they’re all important.
#1: Get pre-approved for a mortgage.
Getting pre-approved helps you understand your budget and shows sellers you’re serious. In this case, I recommend that you contact a mortgage broker to help you sort out your options. A mortgage broker acts as a middleman between you and multiple lenders, helping you find the best mortgage rates and terms based on your financial situation. They can often access exclusive deals not available to the general public and handle much of the paperwork for you.
Janet: The bonus of getting pre-approved is that it will lock in your interest rate while you shop. But part of this process of putting financing in place is also our
#2: Understanding the Stress Test.
Even with a good rate, you’ll need to pass the mortgage stress test.
Maria: That’s right. You will be required to qualify at your rate plus 2%, or the Bank of Canada’s benchmark — whichever is higher. The intention of the stress test is to ensure you can still afford the mortgage if rates increase over your mortgage term.
#3: Budget Beyond the Home Price.
The listing price is just the start. Don’t forget you have to budget for moving and closing costs. Closing costs consist primarily of fees such as legal, appraisal, title insurance, and inspection fees, as well as land transfer tax.
Janet: And as a rule of thumb, we recommend setting aside at least 1.5–4% of the home price for those extra closing costs.
And don’t forget, you also need to consider budgeting for ongoing costs such as property taxes, strata fees, and home insurance.
Maria: Right, and you need to know that lenders will not let you close without home insurance!
#4: Check Your Credit Score.
A good credit score gets you better mortgage rates. Aim for 680 or higher if you want the best terms.
Janet:
#5: Research Government Programs.
There are grants, tax credits, and savings plans that can help, especially if it’s your first home. But hang tight — we’ll dive into the first-time home buyer benefits at the end!
#6: Explore Fixed vs. Variable Rate Mortgages.
Maria: Fixed rates offer stability. Variable rates can save money, if the market stays calm and rates stay low.
Janet: Again, talk to a mortgage broker to figure out what works best for your situation.
#7: Get familiar with your local market.
Canada’s not one market — it’s many. Toronto and Halifax? Very different dynamics, and different fees apply in those markets. For example, there is a special municipal tax in addition to the property transfer tax in cities like Toronto. You need to know this.
Maria: Our recommendation is to work with a local expert who knows what’s happening on the ground. We recommend asking for a few references on the real estate agent you choose to make sure that you’re a good fit.
#8: Always Get a Home Inspection.
Inspections can reveal costly problems. Don’t skip it—even in a hot market.
Janet: It’s peace of mind you’ll be glad you paid for.
#9: Make sure that your down payment is sorted out.
This means you’ll need:
5% for homes under $500,000
For homes between $500,000 and $1.5M, you’ll need 5% on the first $500,000 and 10% on the portion above that
For homes $1.5 million and over: You need a minimum 20% down payment — no exceptions.
Maria: For homes under $1.5M — if you’ve put down less than 20% — you have to get CMHC insurance. While this protects the lender, the cost of this is typically rolled into your mortgage, and it will add 3–4% to your mortgage amount.
Another thing about your down payment — you’ll need to provide proof of your down payment. This means you will have to show documents where your down payment is coming from and that the money has been there for at least 90 days. This is known as the 90-day rule. If you’re receiving a gift for your down payment, then you will need a gift letter confirming that the funds don’t need to be repaid.
Janet:
#10: For First-Time Buyers
Get familiar with the benefits available to you because there are some major perks:
FHSA: Save up to $40,000 tax-free — but you have to have initiated this plan years before to get the full $40,000 benefit. We actually did another video on this topic, so please check that out.
RRSP Home Buyers' Plan: Withdraw up to $60,000 with no tax penalty, but you have to pay it back within 15 years.
First-Time Buyer’s Tax Credit: Worth up to $1,500.
Land Transfer Tax Rebates: In Ontario, BC, and PEI
No GST: Most recently, Prime Minister Carney announced a GST rebate for first-time home buyers on new homes under $1M.
Maria: These programs can lower your upfront costs and help you get into a home faster. Okay, so that’s our top 10.
Janet: Again, a quick review:
Get pre-approved for a mortgage
Understand the stress test
Budget beyond the home price
Know your credit score
Research government programs
Fixed vs. variable rates
Get familiar with your local market
Always get a home inspection
Get your down payment sorted out
Know the benefits available if you’re a first-time home buyer
Maria: Also, know that things change fast! Make sure you’ve lined up your professionals and stay in touch with them to ensure you’re up to date with the rules.
Happy house hunting, and we will see you next time on another edition of Your Wealth Matters.
There’s more to buying a home than signing on the dotted line. If you’re wondering how your next move fits into your overall financial strategy, we’re here to help. The Capstone Asset Management team offers thoughtful, personalized advice to help you make smart decisions today and build resilient wealth for tomorrow. Let’s talk about how it aligns with your goals.