Buying your first home is mostly a money question before it's a house question. Sort out these steps in this order and the house-hunting part gets a lot easier.
1. Open an FHSA if you haven't
The First Home Savings Account is the best deal going for first-time buyers:
- you can put in $8,000 a year, up to $40,000 in total
- contributions are tax-deductible, like an RRSP
- withdrawals for your first home are tax-free, like a TFSA
- unused room carries forward one year, so you can put in up to $16,000 in a single year if you skipped the year before
Room only starts building once the account is open, so open one even if you can't fill it yet. Couples can each have one.
2. Know what the RRSP Home Buyers' Plan adds
The Home Buyers' Plan lets you take up to $60,000 out of your RRSP, tax-free, for your first home. You pay it back into your RRSP over 15 years. You can use it alongside the FHSA, so a couple using both could have well over $100,000 towards a down payment.
3. Work out your minimum down payment
| Purchase price | Minimum down |
|---|---|
| Up to $500,000 | 5% |
| $500,000 to $1.5 million | 5% of the first $500,000, plus 10% of the rest |
| $1.5 million and up | 20% |
On a $600,000 home that's $25,000 + $10,000 = $35,000.
With less than 20% down you'll pay mortgage default insurance. It's added to your mortgage, and the sales tax on it (8% in Ontario) is due at closing.
First-time buyers with an insured mortgage can choose a 30-year amortization, which lowers the monthly payment.
4. Get pre-approved, and understand the stress test
Lenders don't approve you at the rate you'll pay. They check that you could still afford the payments at the higher of your rate plus 2%, or 5.25%. That's the stress test, and it's why a pre-approval is worth getting before you fall for a house.
A pre-approval also holds a rate for a few months, which matters when rates are moving.
5. Budget for closing costs
The down payment isn't the only cheque. On top of it, plan for:
- land transfer tax, less the first-time buyer refund of up to $4,000 (here's the math for St. Thomas and London)
- legal fees and title insurance
- a home inspection
- moving, utilities hook-ups and the first round of small repairs
6. Claim what's yours at tax time
First-time buyers can claim the federal Home Buyers' Amount: $1,500 off your taxes the year you buy.
7. Then start looking
Once you know your number, the search is the fun part. You can browse every St. Thomas and London listing here, or tell me what you're after and I'll send you homes that fit before they're gone.
General information, not financial advice. Program limits as of October 2026; check with your lender and accountant for your situation.