Buying Your First Home in Canada as a Newcomer

Buying a first home is one of the biggest financial steps a newcomer can take in Canada. As a first time home buyer in Canada, you face the same process as anyone else, plus a few extra things to plan for: building a Canadian credit record, saving a down payment, and confirming that you are eligible to buy. This guide walks through the path to ownership and points you to official government and CMHC pages for every number that can change.

There is no need to rush. Many newcomers rent first while they settle, learn the local market, and grow their savings. Treat the months before you buy as preparation time, because the choices you make early shape what you can afford later.

Why credit history and down payment matter

Two things drive whether a lender will approve you and at what terms: your credit history and your down payment. Lenders use your credit record to judge how reliably you repay debt. Newcomers usually arrive with no Canadian credit file, so it pays to start early. Learn build your credit with a starter credit card and on-time payments well before you apply for a mortgage.

Your down payment is the part of the price you pay from your own savings, not from the mortgage. In Canada, if your down payment is less than twenty percent of the purchase price, you generally need mortgage loan insurance, which protects the lender if you cannot pay. The minimum down payment is set by national rules and depends on the home price, so confirm the current thresholds on the CMHC pages in the sources below rather than relying on a figure you read elsewhere.

Are you eligible to buy as a newcomer?

Most newcomers can buy a home, but the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act restricts some non-Canadians from purchasing certain residential properties. Permanent residents and Canadian citizens are not affected, and there are exceptions for many temporary residents, such as some work permit holders, who meet specific conditions. Because this law has changed and been extended, check your status against the official CMHC explainer and frequently asked questions before you make an offer.

Lenders also have programs designed for new residents. CMHC publishes mortgage financing options for newcomers, which can help permanent and some non-permanent residents qualify even with a limited Canadian credit history. Ask your lender or mortgage broker whether a newcomer program applies to you.

Government programs for first-time buyers

The Government of Canada offers tax-supported tools to help first-time buyers save and fund a down payment. Two stand out, and both are run through the Canada Revenue Agency (CRA).

The First Home Savings Account (FHSA) is a registered account that lets eligible first-time buyers save toward a qualifying first home. Contributions are generally tax deductible, and qualifying withdrawals to buy your home are tax-free. There are annual and lifetime limits, and you must be a Canadian resident and meet the first-time buyer definition to open one. Confirm the current limits and rules on the CRA FHSA page.

The Home Buyers' Plan (HBP) lets you withdraw from your Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home, then repay it over a set number of years. There is a withdrawal limit and a repayment schedule, and you must meet the first-time buyer conditions. Check the CRA Home Buyers' Plan page for the current amounts and repayment terms before you withdraw.

Eligibility for both programs depends on residency, so newcomers should verify they qualify. The CRA campaign page on saving for a first home is a helpful starting point.

Mortgage basics and getting pre-approved

A mortgage is the loan that finances the rest of the price after your down payment. Before you shop seriously, get a mortgage pre-approval from a bank, credit union, or mortgage broker. A pre-approval gives you an estimate of how much you may be able to borrow and often holds a rate for a limited time, so you can search with a realistic budget.

Lenders look at your income, your debts, your credit, and your down payment. A common affordability guide is that your monthly housing costs, including principal, interest, property taxes, and heating, should stay within a set share of your gross household income. CMHC's step-by-step homebuying guide explains these ratios and the wider process in plain language.

Additional costs: closing costs and insurance

The purchase price is not the only cost. Plan for one-time closing costs, which can include legal fees, a home inspection, title and registration charges, land transfer tax where it applies, and adjustments. CMHC notes these typically add a meaningful percentage on top of the price, so set this money aside in addition to your down payment.

If your down payment is under twenty percent, budget for the mortgage loan insurance premium as well. The premium is a percentage of the mortgage that varies with the size of your down payment, and it can be paid up front or added to your mortgage. You will also need home insurance in place before closing, and ongoing costs such as property taxes, utilities, and maintenance once you own.

Your first-time buyer checklist

• Start a Canadian credit history early and keep every payment on time.
• Confirm you are eligible to buy under the non-Canadians purchase rules.
• Open an FHSA if you qualify, and check Home Buyers' Plan rules for your RRSP.
• Save your down payment plus a separate fund for closing costs.
• Get a mortgage pre-approval before you start serious house hunting.
• Ask lenders about newcomer mortgage programs and compare offers.
• Budget for mortgage loan insurance, home insurance, and ongoing ownership costs.
• Use a lawyer or notary and a home inspector before you close.

Buying a home as a newcomer is achievable with steady preparation. Build your credit, save deliberately, use the government programs you qualify for, and confirm every dollar figure on the official CRA and CMHC pages below, since limits and rules can change from year to year.