Getting ready to buy

6 to 12 months out: credit and cash

Lenders care about the last year or two of your finances, so this is the time to tidy up:

• Check both credit reports (Equifax and TransUnion) and dispute errors. Pay every bill on time; late payments are the most common fixable problem.
• Keep credit card balances low relative to your limits, and avoid opening new accounts or financing a vehicle before you buy.
• Keep your job and income steady if you can. Self-employed? Lenders usually want two years of tax returns and Notices of Assessment.
• Keep a paper trail for your down payment. Lenders want to see where the money came from, usually 90 days of statements. Gifts from family need a signed gift letter.

First Home Savings Account (FHSA)

If you are a first-time buyer, the FHSA is usually the first account to open. Contributions are tax-deductible, and qualifying withdrawals to buy your first home are tax-free. According to the Canada Revenue Agency, you get $8,000 of participation room in the year you open your first FHSA, unused room can carry forward (up to $8,000), and there is a $40,000 lifetime limit. Room only starts once an account is open, which is why this belongs at the 12-month mark, not the week before you buy.

RRSP Home Buyers' Plan

The Home Buyers' Plan lets you withdraw up to $60,000 from your RRSPs to buy or build a qualifying home, and repay it over 15 years. For first withdrawals from 2022 through 2025, repayment starts in the fifth year after the withdrawal, and the federal government's Spring Economic Update 2026 proposes extending that longer grace period to first withdrawals made through the end of 2028. Confirm the current rules with the CRA before you withdraw.

Down payment and pre-approval

In Canada, the minimum down payment is 5% of the first $500,000, 10% of the portion from $500,000 to $1.5 million, and 20% at $1.5 million and up. Below 20% down, you'll pay mortgage default insurance. Use the down payment calculator and the affordability calculator on our companion site to test your numbers against the federal stress test.

Start with a quick pre-qualification conversation with a mortgage broker or your bank 6 to 9 months out. Then get a full pre-approval with a rate hold about 3 to 4 months before you start writing offers.

B.C. Property Transfer Tax and the first-time buyer exemption

B.C. charges Property Transfer Tax when title is registered: 1% on the first $200,000, 2% up to $2 million and 3% above that, plus an extra 2% on the residential portion over $3 million. Under the first-time home buyers' program, as of April 1, 2024 a qualifying home worth $500,000 or less is fully exempt, and homes up to $835,000 get an exemption of up to $8,000, phasing out to nothing at $860,000. Newly built homes have a separate exemption. Try the closing-cost calculator.

2 to 3 months out: writing offers

• Line up a home inspector and a lawyer or notary before you need them.
• Buying a strata? Plan to review minutes, bylaws, the depreciation report, financials and the Form B before removing subjects.
• After an accepted offer, most B.C. residential purchases include a 3 business day rescission period; cancelling costs 0.25% of the price.
• If you still own a home, decide how you'll handle it before you write. Offers subject to sale are weaker; here's why.

Closing day and wire fraud

Your lawyer or notary will tell you how to send your down payment and closing funds. Phone them at a number you already know to confirm any payment instructions. Fraudsters send fake “updated wiring instructions” by email during real estate deals.

After you move in

If the home is your principal residence, you can usually claim the B.C. Home Owner Grant to reduce your property taxes. You apply every year, by the property tax due date. Update your address with the CRA, ICBC, your bank and your insurers.