First-Time Home Buyer Guide: Programs, Costs & What to Expect
Understanding the Buying Process
Buying your first home in Ontario can feel overwhelming, but it doesn’t have to be. The path to homeownership follows a predictable sequence, but it moves fast once you start. Most first-time home buyers are surprised by how much preparation happens before you ever tour a property.
It typically starts with getting a pre-approval, setting a realistic budget, and finding a real estate agent. In today’s market, two major federal updates have changed the game: you can now get an insured mortgage on homes up to $1.5 million, and first-time buyers are eligible for 30-year amortizations. This means lower down payment requirements for mid-range homes and more manageable monthly payments.
Key Milestone: Get your mortgage pre-approval before you start searching. Sellers take pre-approved buyers more seriously, and it locks in your interest rate for 90-120 days while you shop. It gives you a competitive edge when competing with other offers.
First-Time Buyer Programs You Should Know
There are several programs available at the federal and provincial level that can meaningfully reduce your upfront costs and increase your "buying power."
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FHSA (First Home Savings Account): Contribute up to $8,000/year (max $40,000). Contributions are tax-deductible, and withdrawals for a qualifying home purchase are tax-free.
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RRSP Home Buyers’ Plan (HBP): You can now withdraw up to $60,000 from your RRSP tax-free toward your first home. If you’re buying with a partner, that’s $120,000 in combined capital.
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FTHB Tax Credit: A $10,000 non-refundable federal tax credit, which translates to roughly $1,500 in direct tax savings.
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GST/HST Rebate: Available on newly built homes. While the federal portion phases out between $350,000–$450,000, Ontario provides a provincial rebate (up to $24,000) that helps offset the cost of buying new.
Closing Costs: The Number Most Buyers Underestimate
First-time home buyers typically budget carefully for the down payment, then get blindsided by closing costs. Plan for an additional 1.5%–4% of the purchase price in closing expenses. On a $700,000 home, that’s $10,500–$28,000 in addition to your down payment.
The biggest single cost is the Ontario Land Transfer Tax (LTT). The rate is graduated, starting at 0.5% and rising to 2.5% for luxury properties. If you're buying in Toronto, remember you’ll pay a second municipal tax on top of the provincial one.
The Good News: Rebates
First-time buyers in Ontario are eligible for a rebate of up to $4,000 on the provincial LTT, and up to $4,475 on Toronto’s municipal tax. On a $700,000 home, these rebates can wipe out a significant portion of your closing bill.
Other costs to budget for:
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Legal Fees: $1,500–$2,500
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Home Inspection: $500–$800
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Title Insurance: $600–$900 (varies by property value)
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Adjustments: Reimbursing the seller for prepaid property taxes or utilities.
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Mortgage Default Insurance: Required for down payments under 20%. This is typically added to your mortgage balance rather than paid in cash.
Common Mistakes to Avoid
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Maxing out your mortgage. Even with a 30-year amortization lowering your monthly bill, stretching to your absolute limit leaves no room for property taxes, maintenance, or life’s surprises.
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Forgetting about ongoing costs. Budget for utilities, condo fees, and a maintenance fund (typically 1%–3% of the home’s value per year).
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Making large purchases before closing. Buying a new car or running up credit cards can change your debt-to-income ratio and jeopardize your final mortgage approval. Wait until you have the keys!
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Not using the FHSA. Even if you're buying soon, the tax deduction alone is worth the 10 minutes it takes to open the account.
Ready to Make Your Move? The Oliveira Team Is Here to Help
Buying your first home doesn’t have to be overwhelming, but it does require the right people in your corner. That’s where The Oliveira Team comes in.
Our team specializes in guiding first-time buyers through the Ontario market from start to keys-in-hand. We know which first-time buyer programs apply to your situation, how to structure offers that win in competitive conditions, and how to protect you from the costly mistakes that catch unprepared buyers off guard.
Whether you’re six months away or ready to start searching today, The Oliveira Team is here to help. Contact us today to book your buyers consultation with our team so we can get started on securing your first home.
