Buyer's guide
How buying a home works in Ontario, from first budget to closing day.
Getting started
Before you look at a single home, settle three things: where you want to live, what kind of home you want, and what you can spend.
- Location. Downtown, suburb or small town changes price, commute and lifestyle more than anything else.
- Home type. Detached, semi, townhouse or condo. New build or resale.
- Budget. The mortgage is only part of it. Add property tax, utilities, insurance and any condo fees.
Be specific. The clearer you are, the faster we can find homes that fit.
What can you afford?
Lenders look at two ratios: your housing costs against your income, and all your debts against your income. They also test whether you could still pay at a higher rate than the one you are offered.
Get a mortgage pre-approval from a bank or mortgage broker before you shop. It tells you your ceiling and can hold a rate for you while you look.
Budget for closing costs too: land transfer tax, legal fees, a home inspection and moving. Try the affordability calculator and the land transfer tax calculator.
Your team and what each person does
- Your real estate agent
- Finds homes, books showings, advises on price, and writes and negotiates your offer.
- Lender or mortgage broker
- Approves and funds your mortgage. A broker compares several lenders for you.
- Real estate lawyer
- Reviews the agreement, searches the title, handles the money and registers the home in your name.
- Home inspector
- Examines the home's structure and systems and reports on problems before you commit.
- Insurance broker
- Arranges home insurance, which your lender requires before closing.
Mortgage types
- Fixed rate
- The rate and payment stay the same for the whole term.
- Variable rate
- The rate moves with your lender's prime rate, so your cost can rise or fall.
- Open
- You can pay it off at any time without a penalty. Rates are usually higher.
- Closed
- Lower rates, with limits on extra payments and a penalty for breaking it early.
- Insured (high-ratio)
- Required when your down payment is under 20%. You pay a mortgage default insurance premium, usually added to the mortgage.
Mortgage terms and fees
- Amortization
- The total time it takes to pay off the mortgage, often 25 years.
- Term
- The length of your current contract and rate, often 5 years. You renew at the end.
- Down payment
- The part of the price you pay up front.
- Deposit
- Money paid with your offer to show good faith. It counts toward your down payment.
- Closing costs
- Land transfer tax, legal fees, title insurance and adjustments for costs the seller prepaid.
Making an offer
When you find the home, we prepare an Agreement of Purchase and Sale. It sets out the price, your deposit, the closing date, what stays with the home, and any conditions.
Common conditions are financing and a home inspection. They give you a set number of days to confirm your mortgage and check the home before the deal is firm.
The seller can accept, reject or sign back a counter-offer. We negotiate for you until both sides agree or you walk away.
Common real estate terms
- Agreement of Purchase and Sale
- The contract between buyer and seller.
- Condition
- Something that must happen for the deal to go ahead, such as financing approval.
- Firm offer
- An offer with no conditions, or one where all conditions are met.
- Closing date
- The day you pay the balance and get the keys.
- Chattels and fixtures
- Chattels are movable items such as appliances. Fixtures are attached to the home. The agreement says which are included.
- Status certificate
- For condos: a document on the building's finances, rules and fees. Have your lawyer review it.
- Title insurance
- Protects you against problems with ownership of the property.