Canadian Home Buyer’s Guide
28 Dec 2019
The purchase of a new house is a big step, and, for many prospective home buyers, it’s easy to overlook some of the more important details of this process.
Luckily, there are a host of resources in Canada that can help first-time homebuyers like you navigate this potentially difficult process. From interest rate trackers to government incentives, here’s a look at how you can make your dream a reality.
Know The Market
The housing market in Canada changes rapidly, especially in populated and popular cities. Canada has some of the highest homeownership rates in the world. In fact, 67.8 percent of Canadians own their own property.
However, homebuyers who want to set down a down payment of 20 percent or more are now subject to stricter qualifying criteria, which is also known colloquially as the “stress test.”
In particular, millennials have found it difficult to afford a new home under these new standards. It is, therefore, essential you know the difference and benefits of fixed-rate and variable mortgages, as well as who has the best mortgage rates in Canada.
Once you understand the financial logistics of homeownership, it’s time you consider location specifics. While you’ll no doubt want to visit areas where new homes are under construction, you should also consider area property taxes, as well as heating, electric costs and home repair costs, especially if your home is not newly built.
After you have an idea of the type of home you want, hiring a real estate agent may be beneficial. In fact, the Canadian Real Estate Association has an easy-to-use search platform. Simply find a reputable real estate agent near you who understands your needs and wants, and who will help you navigate this process and get a better price on your new home.
First-Time Homebuyer Incentive
The Canadian government wants you to own your home. As an incentive, most Canadian citizens qualify for the first-time homebuyer incentive plan. So, how does it work? Any family who makes $120,000 per year or less qualifies for this incentive, which helps first-time buyers not have to incur any further financial burden.
However, qualifying individuals or families must meet insured mortgage down payment requirements. After qualifying for this incentive program, the Canadian government provides 5 percent to 10 percent of a buyer’s purchase for a newly constructed home or a flat 5 percent on the resale of an older home.
While this percentage may not seem like much, consider this example: If the house sells for $400,000, just 5 percent covered by the government would reduce $20,000 from the cost you ultimately must buy. This not only lowers the overall cost of the house, but also the monthly mortgage payment.
You’re Not Alone
With such a high percentage of Canadian citizens owning homes, you likely know people who know a thing or two about real estate. These friends and family are a wealth of knowledge when it comes to homeownership. While their experiences may not be applicable to your situation, it’s still worth knowing the paths others have taken.
Of course, it’s essential you know the trends of the overall housing market and determine whether a fixed-rate or variable mortgage is right for you. Plan ahead so you know all the costs of homeownership, even after you close the deal. Lastly, take full advantage of any and all Canadian government incentive plans for new homebuyers.
Craig is a husband, a father, team leader, senior youth group coordinator, designer, brander, community builder, volunteer, blogger, and social media manager. Craig likes to go camping, travel, go on road trips, watch movies, read with his girls, build stuff, operate the grill, and play bass guitar. In June 2017, PR firm Cision identified Craig as one of Canada’s top 10 most popular male bloggers in the parents and family space. Known as Big Daddy Kreativ, his blog specializes in travel, lifestyle, food, automotive, events, parenting, movies, tech, recipes, health, pets, reviews, and giveaways.