Quick answer: Open an FHSA today, even years out, because its 15-year clock starts the day you open it. Get a real pre-approval before you shop. Then budget 1.5% to 4% of the purchase price for closing costs, which is the number that ambushes most first-time buyers.
The down payment is the easy part. You have been saving toward it for years and you know the number by heart. It is the seven weeks after your offer is accepted that nobody prepares you for.
We put an offer on the house in the same week we found out our daughter was on the way.
We had been telling ourselves we would sort out the wills and the powers of attorney whenever one of two things happened: we bought a house, or we had a kid. Both landed inside seven days. God has a sense of humour about the lists we make.
The process moves faster than the life going on around it, and most of what goes wrong gets decided in a week when a capable man simply ran out of room to think.
So think now, while it is quiet.
This is the mechanical half. Whether you should buy at all, and how much house you can carry, is its own article and the one to read first.
The three accounts, and which one comes first
Two of Canada's registered accounts were built for homebuying, and a third covers what they leave behind. Most first-time buyers use one and never learn what the other two would have paid them.
The FHSA comes first
The FHSA (First Home Savings Account) is the best account in Canadian tax history for first-time buyers, and it is not close. You get a deduction on the way in, like an RRSP, and a tax-free withdrawal on the way out, like a TFSA. No other Canadian account does both.
I had one. So did my wife. We each put in the $8,000 annual maximum for two years, $16,000 each and $32,000 between us, and withdrew all of it for the house we live in now. I do not have an FHSA today and would not qualify to open one. That is the account doing what it was built to do and then getting out of the way.
- $8,000 per year, $40,000 lifetime. Unused room carries forward to a maximum of $8,000, so the most you can put in during one year is $16,000.
- Deductible going in. At a 30% marginal rate, an $8,000 contribution is roughly $2,400 back at tax time.
- Tax-free coming out for a qualifying home. The growth is yours and the CRA takes nothing.
- Eligibility. Canadian resident, 18 to 71, and no home you owned and lived in during the current year or the preceding four.
Open it now, even three or four years out. The 15-year lifespan starts the day you open it, and contribution room builds whether you fund it that week or not. Wealthsimple offers one with no fees, and your bank will too, usually with fewer investment options. The only version of this account that fails you is the one you never opened.
The Home Buyers' Plan, second and only sometimes
The RRSP Home Buyers' Plan lets you withdraw up to $60,000 tax-free toward a first home, but you repay it into your RRSP over 15 years, and a missed payment gets added to your taxable income that year. That is a real obligation on a household that just bought a house.
You are allowed to use both accounts. The 2022 proposal would have made you choose, the restriction never made it into the law, and the CRA has since confirmed it. Fill the FHSA first either way. I compare them properly in FHSA vs RRSP Home Buyers' Plan, and the FHSA Planner will run your timeline.
The TFSA, for what the other two will not cover
The TFSA has no homebuying provisions and needs none. Withdrawals are tax-free and the room comes back the next calendar year. It is where down payment overflow goes once the FHSA is full, and where your closing costs should be sitting.
What actually happens, from pre-approval to keys
- Get pre-approved
- Find a realtor
- Make an offer, with conditions
- Home inspection
- Mortgage approval
- Closing day
- Moving day
Step 1: The pre-approval worth having
A lender reviews your income, credit, debts and down payment, then tells you in writing what it will lend and at what rate. The final yes comes after you find the property. What this buys you now is a real number instead of a hopeful one, and it locks your rate for 90 to 120 days.
What you will need: pay stubs or a letter of employment, two years of Notice of Assessment from the CRA, bank statements showing your down payment, and a list of your debts.
Step 2: Find a realtor
A buyer's agent costs you nothing out of pocket in most Canadian markets, since the seller typically pays both commissions. Interview two or three, and pick the one who listens more than they talk.
Step 3: Make an offer, and keep your conditions
Your agent will help you write it. In most cases it should be conditional on financing, which protects you if the lender declines the property, and on a satisfactory inspection. In hot markets buyers get pressured to drop both to "win" a bidding war. Think very carefully before you give up either one.
Step 4: The inspection you will be tempted to skip
A qualified inspector examines the roof, foundation, electrical, plumbing, HVAC, insulation and structure, for $400 to $600 over two or three hours.
Do not skip this. A $500 inspection can reveal $30,000 in hidden problems. Foundation cracks, knob-and-tube wiring, water behind walls, an aging roof: these are what turn a great deal into a sinkhole. If the inspector finds something, you can renegotiate, ask the seller to repair it, or walk. That is the whole point of the condition.
Step 5: Mortgage approval, and the 20% line
Your lender does its final review and issues the commitment, including an appraisal to confirm the house is worth what you are paying.
Under 20% down, you need CMHC mortgage default insurance, which protects the lender rather than you and is added to your mortgage balance. The premium runs 2.8% to 4.0% depending on loan-to-value. Ten percent down puts you at the 3.10% tier, so a $500,000 home with $50,000 down carries a $13,950 premium on its $450,000 mortgage. CMHC's insurance page has the official table.
Twenty percent down avoids it and saves you thousands. But do not drain your emergency fund to reach it. Paying the premium is an annoyance. Closing with no cash left is a problem.
Step 6: Closing day
Your lawyer transfers ownership, registers the mortgage, and manages the flow of funds. You sign a stack of documents, hand over certified funds, and get the keys. Buying a condo adds one document worth reading properly: the status certificate tells you what the reserve fund holds and whether a special assessment is coming.
Step 7: Moving day
You own a home. The real work starts now, and the first repair will find you inside the first month. Because it will.
Where to actually get the mortgage
The rate your bank offers you at the branch is almost never the best rate available. Shop it. Ratehub shows current rates side by side once you enter your province, purchase price and down payment.
Then talk to a broker. A broker works for you and a bank's specialist works for the bank. Brokers reach dozens of lenders, including credit unions and monolines with no branches, and the lender pays them, so there is usually no cost to you.
If you are in ministry, raise this before you apply. I am a pastor, and we have a wrinkle here nobody warns us about. The clergy residence deduction lowers the net income reported on your Notice of Assessment, and that Notice of Assessment is precisely what a lender reads to decide what you can borrow. The deduction that saves you tax in April can quietly shrink the mortgage you qualify for in June. Keep claiming it, and tell your broker early, so they can place you with a lender who reads a housing allowance properly rather than discovering it three days before your financing condition expires.
Then let your own bank compete. A rate 0.15% lower on a $400,000 mortgage saves roughly $12,000 over 25 years, which is worth one phone call. The same goes at every term end, since a mortgage renewal is where most Canadians quietly overpay by signing whatever arrives in the mail.
Closing costs nobody warns you about
- Land transfer tax, after rebate $2,475
- Legal fees $2,000
- Moving $1,500
- Immediate repairs $1,500
- Tax on the CMHC premium $1,116
- Inspection and title insurance $900
How much land transfer tax will you pay?
Every province charges one. In Ontario, the tax on a $500,000 home is $6,475. Buy inside Toronto and you pay that plus a municipal land transfer tax, which roughly doubles the bill.
The first-time buyer rebate is worth claiming loudly. Ontario refunds up to $4,000, and Toronto adds up to $4,475 on top. Make sure your lawyer applies them at closing.
Alberta and Saskatchewan charge land title fees instead, a fraction of the Ontario bill. British Columbia's first-time buyer exemption changed in 2024: full below $500,000, an $8,000 exemption from $500,000 to $835,000, proportionally reduced to $860,000, nothing above.
What your lawyer and your title insurance cost
Expect $1,500 to $2,500 in legal fees plus disbursements. Get quotes from two or three, because prices vary more than people expect. Title insurance covers you against fraud, zoning violations and undisclosed liens for a one-time $300 to $500, and most lenders require it anyway.
The CMHC cost that cannot go in your mortgage
Under 20% down, the premium is added to your mortgage balance, which raises your payment for the whole amortization. The part almost nobody mentions is the tax on it.
In Ontario, Manitoba, Quebec and Saskatchewan you owe provincial sales tax on that premium, and it cannot be rolled into the mortgage. Ontario charges 8%. On the $13,950 premium above, that is $1,116 in certified funds on closing day, out of your own pocket.
What the first month actually runs
Movers for a local move cost $800 to $2,000, and a rental truck is cheaper if you have the time and the back for it. Then budget $1,000 to $2,000 for locks, minor repairs, smoke detectors and tools. Something will need attention immediately. It always does.
Adding it up
On a $500,000 home in Ontario with 10% down:
| Cost | Estimate |
|---|---|
| Land transfer tax (after rebate) | $2,475 |
| Legal fees and disbursements | $2,000 |
| Moving costs | $1,500 |
| Immediate repairs | $1,500 |
| Provincial sales tax on CMHC premium | $1,116 |
| Home inspection | $500 |
| Title insurance | $400 |
| Total | ~$9,491 |
That sits on top of your $50,000 down payment, and it is roughly 1.9% of the purchase price. Put 20% down and the CMHC tax line disappears. Add $300 to $500 for an appraisal if your lender charges you for it.
If this number surprises you, good. Now you can plan for it.
Common mistakes Christian homebuyers make
Plenty of good, faithful men make these. Every one of them is avoidable.
1. Buying too much house
"God will provide" is a statement of faith, and it was never meant to double as a mortgage qualification strategy. If you can only carry the payments with no job loss, no rate increase, no major repairs and no new baby, you are holding risk you cannot absorb and calling it trust.
Buy less house than the bank says you can. You will sleep better. You will give more freely.
2. Waiving the inspection to win a bidding war
Sellers prefer offers with no conditions because they close faster, so buyers drop the inspection to look "cleaner."
This is one of the most dangerous financial decisions you can make. You are committing hundreds of thousands of dollars to a property you have not examined, and a failing foundation, mould in the walls or an aging septic system can cost tens of thousands to fix. You have no recourse once you close without the condition.
Proverbs 14:15: "The simple believe anything, but the prudent give thought to their steps."
If waiving the inspection is the only way to get the house, it is not the right house.
3. Letting the mortgage quietly eat the giving
This happens more often than anyone admits. A couple stretches to buy, and then the mortgage, property tax, insurance and utilities take so much of the income that giving becomes the first thing to flex. The tithe drops. The offering gets skipped. The generosity that marked their life before the house quietly disappears.
That is the "slave to the lender" dynamic arriving through the front door. If your mortgage displaces your giving, you bought too much house. Build the budget with giving as a fixed line before you settle on a housing number, and use the Financial Health Scorecard to lock in your take-home pay, your giving and your real monthly baseline before a lender tells you what you can "afford."
A house is one of the easier things to build an identity on. Where your security actually rests is the thing a mortgage cannot settle for you either way.
4. Ignoring the true cost of ownership
Budget another 1% to 2% of the home's value per year for maintenance, which on a $500,000 home is $400 to $800 a month before property tax, insurance and utilities.
The furnace will die. The roof will need replacing. The dishwasher will flood the kitchen on a Sunday morning. Plan for it.
Common questions
Can I use the FHSA and the Home Buyers' Plan on the same purchase?
Yes. The 2022 proposal would have forced a choice, that restriction never made it into the legislation, and the CRA has confirmed both work for the same qualifying home. Up to $40,000 from an FHSA plus $60,000 from an RRSP per person, doubled for a couple.
Does the clergy residence deduction affect what mortgage I qualify for?
It can. The deduction lowers the net income on your Notice of Assessment, and lenders use that document to decide what you can borrow. Keep claiming it, and tell your broker early.
Build it with your eyes open
This is unfamiliar work rather than difficult work, and unfamiliar is what lets a bank, an agent, or your own optimism decide things you should be deciding.
So do the boring parts properly. Open the FHSA before you need it. Get the real pre-approval instead of the calculator estimate. Budget for closing costs at the top of the range. Take less than you are approved for.
We signed our offer in a week that had already handed us more news than we knew what to do with. The parts that went well were the parts we had settled long before that week arrived.
Psalm 127:1: "Unless the Lord builds the house, the builders labor in vain." Do the work carefully, and hold the result loosely.
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