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First time home buyer newcomer tips

For many newcomers, owning a home in Canada is a source of pride, satisfaction, and accomplishment! And, buying a home is also an investment that grows over time and provides a great financial benefit. But before jumping in, consider these vital first-time home buyer tips!

Buying your first home is an expensive decision. And, it will likely be the biggest purchase that you make in your lifetime. So you want to ensure that you understand exactly what’s involved. Buying a home in Canada may be different than in your home country. From the home buying process to the types of homes and styles, layouts, and materials, there are many differences.

Should You Rent or Buy a Home?

Many newcomers arrive in Canada with savings to buy their first home. In fact, a 2019 survey conducted by Royal LePage revealed that newcomers represent a growing segment of the Canadian real estate market. Some of the findings showed that newcomers:

It makes sense that newcomers are eager to enter the housing market in Canada. Indeed, owning your own home is exciting for many reasons. Homeownership can be a great investment and a way to build personal wealth. Young families may want more space with a backyard for children to play. Or, buying a home in Canada may be an important part of your immigration dream!

But rarely do people have enough money to buy a home outright. This is where lenders can help you by giving you a loan, also known as a mortgage. But, you will need enough savings to pay for a down payment before you can get approved for a mortgage. 

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What’s a Down Payment?

Essentially, a down payment is a portion you put down towards the value of your home right up front. If you don’t have enough for a down payment, you’ll have to build your savings. You subtract the down payment from the purchase price of the home and you supplement the remaining cost with a mortgage.

In addition to saving money for a down payment, there are other costs that you will have to pay, such as closing costs. It’s important to factor in the closing costs because they can be costly and often take first-time homebuyers by surprise.

So before you rush into buying a home, it’s important to understand all the costs involved for a first-time home buyer in Canada. 

When Renting a Home Makes Sense

If you have recently arrived in Canada, you’ll discover many things in the city you have landed in. And, you may discover that you love the city and want to make it your home. On the other hand, you may learn that it’s not quite what you had expected. Or, you may land a job in a different city and want to relocate to another region or city in Canada. When you first arrive in Canada, it’s best to continue renting until you’re certain about where you want to live long-term. 

Renting a home versus buying a home makes sense if you:

When Buying a Home Makes Sense

A large advantage of buying a house is the sense of pride that comes from owning your home in Canada. In addition, you become a part of a community where you know your neighbours and gain a sense of belonging. And most importantly, you’ll gain financial benefits when you: 

In general, it makes sense to buy a home if you plan to remain in the city for five years or more. 

Three Financial First Steps Before You Buy a Home

Before you become a first-time homebuyer, you need to prepare to meet new financial obligations. These are three important steps to take before you buy a home:

1. Establish Credit History:

When buying a home as a newcomer, you also have to establish your credit history in Canada. You can begin to build your credit by getting a credit card, or applying for a small loan and making regular payments. 

2. Build an Emergency Fund:

Another important factor to consider before you buy a home is how stable your financial situation is. When you decide to purchase a home, you need financial discipline. For example, it’s important to save money for an emergency fund. When you own a home or a condo, you need to set aside money to deal with unexpected issues such as a leaky roof, basement flooding, or a burst pipe.  Any of these expenses could be thousands of dollars.

3. Save for a Down Payment:

Most importantly, you need to save for your down payment. However, you can own your home in Canada with as little as just a five percent down payment and mortgage insurance.

Saving Money for Your Emergency Fund

5 Tips to Get the Best Mortgage Rates in Canada

How Much Mortgage Can I Afford?

Settle in Canada with Confidence and Ease

What’s the Minimum Down Payment Rule in Canada?

In Canada, the minimum down payment is the percentage of the home’s purchase price. And depending on the house price, the minimum down payment amounts vary.

For example, the minimum down payment is:  

Until you have made some firm decisions, it may make more sense to continue renting a home before you buy a home.

Important Questions for First-Time Home Buyers

In addition to thinking about financial first steps, you’ll also need to consider other practical questions such as:

How Much Can You Afford?

As a guideline, financial experts state that you should not pay more than 30% – 32% of your total household income for housing and home-ownership costs such as:

But, that’s a guideline. You may decide to budget more for housing or, cut back on other discretionary expenses such as entertainment or dining out. Read more about mortgage affordability.

Can You Get Pre-approved for a Mortgage?

A mortgage pre-approval means that a lender has stated that you qualify for a mortgage loan based on your current income and credit history. The pre-approval will indicate the:

The lender will assess your financial situation and determine how much they are willing to lend to you to buy your house. This will give you confidence when choosing which homes to consider buying. It will also help when you make an offer on a property because the buyer knows you are serious and able to make the purchase.

What Home is Right for You?

When you’re ready to search for a home, you need to consider:

When you answer these questions, you can narrow your house search to find the ideal home for your needs. You can also provide this information to your realtor who can help you find your ideal home in Canada. Realtors are trained and licensed to help you find and buy a resale property. You may decide to choose an agent who has sold other properties in the areas that you are considering. Or, you may choose a realtor that a friend or family member recommends.

Talk to the realtor about the important things to you in a home, but keep a realistic approach. Many Canadians buy a starter home” and then work their way up the property ladder. Be ready to accept that your price range may not cover all the features you want in a house.

You do not pay for the services of a realtor. Realtors earn their money by keeping a commission on the selling price of the house that they help to sell. The commission is paid by the seller, not by you the buyer.

Making an Offer

Once you’ve found a property you want, you’ll want to make an offer. An offer represents your desire to purchase the property and the amount you’re willing to pay.

Your real estate agent can advise on the price you should offer on a resale home based on your local market conditions and recent home sales in the neighborhood.

After agreeing on a price, the seller will stop showing the property to other prospective buyers because the home is now ‘conditionally sold’ to you, and will begin to take the necessary steps to complete the transaction.

Similarly, you will also need to begin taking steps to fulfill your part of the purchase process, including any conditions you may have listed in your offer such as a home inspection or finalizing financing. These vary by location, and your realtor is a good person to ask about the next steps.

Typically, the offer-to-purchase agreement will include:

Property Details:

This is a detailed description of the residence’s address, including street name, house, lot, and block number. It will also often include a list of additional items included in the sale (appliances, garage door openers window coverings, etc).

Transaction Details:

Here a clearly-stated purchase price that both parties have deemed acceptable will appear. There will also be a description of the deposit amount here. A deposit demonstrates that you are serious about your offer, and will persuade the seller to not entertain any further offers. The Offer will also often contain the payment method (cheque, credit card, etc.), as well as mention who will hold the deposit.

Closing Date:

This is the date when the property becomes yours and you are free to move in. By this time, any previous owner is expected to have removed all of their belongings and cleared any of the conditions you may have imposed.

A Statement of Transfer of Insurances and Warranties and Representations:

Typically, the seller is responsible for the property until the closing date and guarantees that they have the legal right to sell the property. They also guarantee that all buildings and improvements do not encroach upon neighbouring lands.

Additional Terms:

Here you’d place any additional modifications or improvements to the property that have been agreed upon by both seller and buyer.

Conditions:

This is where you’ll typically find a list of agreed-upon conditions of sale, the breach of which could result in a nullification of the purchase agreement. This could include a description of financing conditions, property inspection conditions, condominium documents conditions, and the sale of buyer’s home conditions.

Closing Costs When Buying a Home

In addition to your mortgage, there are several closing costs that you must pay before you can take possession of your house. To “take possession” means the home is now legally yours. First-time home buyers are very often surprised when they learn of these additional costs. Examples of closing costs that you can expect to pay include:

Appraisal Fee:

This is the cost for an appraiser to assess the property value. Your mortgage lender may require an appraisal to determine whether the selling price is reasonable for the market.

GST:

You must pay the Goods and Service Tax (or Harmonized Sales Tax) on a newly constructed or substantially renovated home. Resale homes do not require a GST payment.

Land Transfer Tax:

This is a tax charged to buyers in most provinces, usually based on the purchase price.

Mortgage Default Insurance:

High-ratio mortgages (those with less than 20% down payment) require mortgage default insurance. The cost is usually added to the mortgage it varies depending on the amount of your down payment.

Mortgage Life Insurance:

Special insurance coverage to cover the cost of your mortgage in the event of death or severe illness is available from most lenders.

Home Inspection Fee:

Hiring a home inspector is voluntary but recommended for resale homes, and usually, the cost ranges from $400-$600. With a home inspection, you may discover issues with the house that will cause you to back out of your offer altogether. Or, the home issues may be manageable and you could ask for a lower purchase price to offset any repair expenses.

As well, you may want to bring in trades such as an electrician, a plumber, and perhaps a structural specialist to ensure you understand all the home systems. They can also provide cost estimates for repairs if needed.

Why You Need a Home Inspection When Buying a Home

When you buy a home, it’s important to conduct a home inspection. This is usually done before you make an offer, and the offer is usually conditional upon inspection. When inspecting a house, a home inspector will look for:

Foundation: home inspectors will look to see if there is a leak in a foundation wall and whether insulation is in place. If there’s an active leak, they will determine the condition behind the wall.

Plumbing: an inspector will determine if the drains are installed properly and not leaking.

Windows: the inspector will make sure that the window seals are not damaged. For example, if one of the windows gets fogged, that tells that the window has to be replaced. Next, the home inspector will look at the frame to see if there are any openings that have to be resealed; otherwise, you may get an air leakage.

Furnace: the home inspector will check the quality of the filter and whether it is installed properly. They will check the quality and age of the furnace itself and whether it’s leaking any water inside or gas, which could be very critical.

Mold:  an inspector will also look for mold (or termites) in the house because it can result in significant costs to repair later.

First-Time Home Buyer Tips for Newcomers

Be Informed: Take advantage of free tools and resources to learn about buying a home as a newcomer and learn about mortgage deals for newcomers.

Know How Much You Can Afford: You can use online mortgage calculators that will give you approximate costs, and monthly mortgage payments.

Get a Pre-Approved Mortgage: You can talk to your lender about getting a pre-approved mortgage certificate.

Use a Realtor: There are many different real estate companies in Canada and many agents to choose from.

Get a Real Estate Lawyer: A real estate lawyer will review your purchase agreement contract. The wording in these contracts is very important and your lawyer will make sure everything is done properly in terms of the law.

Prepare a Budget: Plan for your home closing costs or the costs associated with the date on which you actually take possession of your home.

When buying a home in Canada, it’s vital to consider these first-time home buyer tips. Learn the essentials and become informed about everything that’s involved. Homeownership provides great pride, security, and achievement. And when you’re informed about your home buying decisions, you’ll feel confident about your purchasing decisions!

For more information, tools, and free webinars about living in Canada visit our Settling in Canada resource page. We’ll help you to settle in Canada successfully!

For most newcomers and international students arriving in Canada and seeking accommodation, a short-term rental usually comes first, followed by a longer-term rental.

But there is another housing solution for newcomers: home-sharing, or rooms for newcomers.

Home-sharing, of course, is not new to Canada. Other home-sharing programs exist, primarily focused on keeping seniors living and aging in place and helping students find affordable accommodation.

Home-share solutions for newcomers

But now Sparrow, a Canadian home-sharing platform is looking to help immigrants explore, and find, home-share solutions with rooms for newcomers.

It’s also looking to enlist settled newcomer homeowners as hosts. 

To achieve this, Sparrow has teamed with Prepare for Canada to make hosts, and rooms, available to newcomers.

Sparrow teams with Prepare for Canada

This Sparrow-Prepare for Canada initiative aims to provide immigrants and international students with accommodation sharing, another housing alternative to apartments, condos, or house renting.

“We need to do a better job of making it easier and safer for newcomers to find good housing options in Canada,” said Oren Singer, co-founder and CEO of Sparrow. “There’s a ton of underutilized housing space in the form of spare rooms and basements.

“With the cost of living so high these days, we’re seeing many homeowners turning to home-sharing as a way to supplement income.”

The rooms-for-newcomers project is definitely timely. 

Rental demand across the country is soaring (and vacancy rates are falling) as tens of thousands of newcomers and international students arrive each month. 

“We need to do a better job of making it easier and safer for newcomers to find good housing options in Canada.”

Oren Singer, Co-founder and CEO, Sparrow

Five million spare bedrooms in Ontario

To reach the optimal vacancy rate of three percent (it’s now hovering around 2 percent), the report said Canada would need to add 332,000 rental units over the next three years, which would mark an annual increase of 20 percent compared with the 70,000 units built last year.

Sparrow estimates that there are over 12 million empty bedrooms across Canada. 

In Ontario alone, it’s estimated that more than half of residents — and three-quarters of those over the age of 65 — live in houses that are bigger than they need, leaving five-million spare bedrooms across the province, according to a pre-pandemic report by the Canadian Centre for Economic Analysis.

Newcomer homeowner hosts are also needed

“We have an opportunity and responsibility to reimagine how we use and share our housing space,” says the Sparrow website.  The company also notes that one in five Canadian renters spends more than half their income on shelter costs.

Obviously, to meet the demand for accommodation sharing, Sparrow and Prepare for Canada are looking for hosts in addition to housemates. 

Toronto host is paying it forward

The lack of affordable housing for renters, plus population growth and inflation, inspired homeowner Karen H. to become a Sparrow host. “I decided that I could pay it forward by helping somebody get in a space to live at a reasonable price.”

Karine S., who rents a room from Karen in Toronto, said that initially, she didn’t know about the Sparrow concept of housemates and renting a room. She said she was hesitant at first because of previous issues with roommates. 

A Sparrow Story – Karen & Karine from Sparrow on Vimeo.

“I was a little bit wary going into this,” she said, “but the thing that really clarified it for me was actually finding a compatible match (Karen).”

Rental costs in Canada are soaring

In addition to demand and competition for rentals, the price of rents across Canada keeps increasing, particularly in popular Gateway cities such as Toronto, Vancouver, and Montreal.

In March of 2023, a one-bedroom apartment in Toronto costs $2,506 a month. A one-bedroom in Saskatoon (one of Canada’s most affordable cities for rent) costs $1,123 monthly.

So, how do “rooms for newcomers” work?

Sparrow’s home-sharing platform and community match hosts with spare bedrooms with newcomers and international students seeking budget-friendly places to live. The company also sees its business as building social connections and increasing the quality of life for Canadians.

In fact, a recent study shows that “altruistic motivations were expressed by home providers with respect to the difficulty young people face in finding housing in large urban areas.” Intergenerational learning was also cited as a motivation for hosts. 

Housemates can rent for as little as two months

Under the Sparrow/Prepare for Canada initiative, newcomers can rent a room for as little as two months or a full year. 

“You decide how long you’d like to home share for, and we’ll find you the right fit,” says Sparrow.

Here’s how the program works for newcomers in four easy steps:

  1. 1. Create your free account and member profile, and say what kind of place you’re looking for.

2. Connect with a pool of like-minded hosts who have bedrooms for rent and choose the right fit for you.

3. Review and sign your home-share agreement.

4. Move into your new home. Sparrow’s concierge team is available every step of the way.

According to Sparrow, the average rent is approximately $750 monthly, depending on the home and location (according to Rentals.ca, the asking rents for all property listings in March reached an average of $2,004).

Focus on safety and security

Sparrow does credit and background checks and attempts to match people based on compatibility.

Hosts can list their space and create a profile for FREE. A service fee for hosts is only charged once the host has received the first rental payment from the housemate.

The host service fee (a one-time only fee) ranges from 1/4 – 1 month’s rent, depending on the length of the  home share contract:

2 – 3 month term length = 1/4 month’s rent fee
4 – 5 month term length = 1/2 month’s rent fee
6 – 9 month term length = 3/4 month’s rent fee
10 – 12 month term length = 1 month’s rent fee

There are no Sparrow service fees for housemates.

The company focuses on ensuring safety and security. Its matching process involves rigorous identity verification, background checks, home share agreements, and screening interviews. Sparrow also matches based on compatibility to enable better connections based on habits, lifestyles, and living preferences.

Anyone who decides to become a host should check with their insurance company to see if any additional coverage is needed.  

Sharing accommodation is an affordable option for newcomers

“Rooms and/or basements on the Sparrow platform are more budget-friendly compared to an average studio or 1-bedroom rental rates,” says Singer.

“We’ve been helping newcomers make connections that simplify the immigration journey for over 12 years,” says Dave Frattini, managing partner of Prepare for Canada and Rentals for Newcomers.

“Sparrow is a purpose-driven home-sharing platform and community that makes it easy, safe, and enjoyable to rent a room,” said Frattini.  

“Together, we’re on a mission to help newcomers enter the rental market faster and easier than ever by connecting newcomers with newcomer and newcomer ally homeowners who can help newcomers find safe and affordable housing.  We’re pleased to launch this initiative, and we look forward to reaching out to any homeowners across the country who want to contribute to building this innovative housing solution for newcomers.”

Matching newcomers to a place they can call home

For newcomers to Canada and international students, renting a room represents an affordable and viable path to sharing accommodation in Canada, and a chance to make a lifelong friend. 

“We’re proud to collaborate with Prepare for Canada to help connect and match newcomers to places they can call home,” says Singer.

Newcomer homeowners and renters can sign up here.

A real estate agent is handing over keys to a newcomer couple after helping them find rental housing in Canada.

Working with a real estate agent is a reliable alternative way for newcomers to Canada to find their first long-term rental accommodation.

Why should newcomers consider working with a real estate agent (also known as a realtor) to find a rental?

Demand, competition, expertise, and access to landlords are four obvious reasons (also, doing it by yourself in a new country can create a lot of stress, delay, and wasted effort). 

Immigration helps drive rental demand

In Canada’s red-hot rental market, the demand for all types of rental accommodation has never been higher. 

The country’s ambitious immigration targets are absolutely fuelling rental demand as prices rise each month. And that demand will only get stronger across the country, but particularly in Toronto, the Greater Toronto Area (GTA), and Ontario. 

Canada intends to welcome 465,000 new immigrants this year after admitting a record-breaking 431,000 newcomers in 2022 (mostly from India, the Philippines and China).

In 2024 that number will rise to 485,000 newcomers, and then to 500,000 in 2025. 

Competition for rentals is fierce

Canada has also welcomed a record number of international students. These numbers are forecast to continue to rise, again increasing the demand for rental housing.

With so many newcomers arriving in Canada, the competition for available rental accommodation continues to escalate. Typically, rental listings in Canada (particularly those with choice locations) receive multiple offers from newcomers and those already living in Canada. And many of those applicants have done their research and are prepared to act quickly. 

Real estate agents have expertise

Real estate agents have the expertise that newcomers can use to get exactly the kind of rental accommodation they want, where they want it, and when they want it. 

According to the Real Estate Council of Ontario, in which membership is mandatory for all real estate professionals in Ontario, there are more than 86,000 real estate agents in the province.

[cjtoolbox name=’Renting Webinar’]

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Key reasons to use a real estate agent in Canada

Using a real estate agent to help you find your ideal rental property typically costs nothing.  Your future landlord (the actual owner of the property) covers the realtor commissions. 

In Ontario and the GTA, more renters are using real estate agents because realtors:

Finally, the realtor’s access to landlords and listings cannot be overstated. Because of this access, realtors know about rental properties that aren’t listed on rental sites, or that are about to be listed. So, you get a head start on the competition. This is particularly true regarding Toronto/GTA condo owners who often work only through real estate agents.

These are just some of the advantages that come with working with a real estate agent. 

Other factors to consider

While real estate agents in Ontario are licensed, there are still some other things newcomers should consider when deciding to work with one to find a rental:

Finding a real estate agent in Canada

So how do you find the real estate agent that’s right for you?

Prepare for Canada and Rentals for Newcomers has teamed up with Souqh, a real estate fintech solutions company, to make it easy for newcomers and international students to work with a licensed real estate agent to find suitable rental accommodation.

Souqh is a Canadian real estate and home services marketplace whose goal is to simplify every step of the home buying, ownership, and rental journey. 

Connecting newcomers with realtors

Ahmer Rafiq, Souqh’s CEO, says his company partnered with Prepare for Canada and Rentals for Newcomers “to connect immigrants with realtors and assist with finding rentals across Ontario.”

“We have onboard 3,000+ real estate/home services professionals onto our marketplace across Ontario and … we have partnered with ten real estate boards and associations across Ontario.”

Dave Frattini, the managing partner of Prepare for Canada and Rentals for Newcomers, is excited about working with Souqh to help newcomers access real estate agents.

“Prepare for Canada has been helping newcomers make connections that simplify the immigration journey for over 12 years, said Frattini, “and Souqh is Canada’s real estate and home services marketplace. Together we’re on a mission to help newcomers enter the rental market faster and easier than ever before by connecting newcomers with real estate agents who can assist in finding the rental property that’s right for our newcomer audience needs.”

How to register

So, if working with realtors to find accommodation in Ontario appeals to you, simply click here to register with Souqh. Once you register, a real estate agent in the city where you wish to rent will respond to you.  

And remember: If you’re not in Canada or Ontario yet, but are arriving soon, please register for our Renting in Canada webinar to learn all about working with a real estate agent, finding your own rental, renting a room in a home,  and all the other options for finding rental accommodation in Ontario and Canada. 

*No AI-generated content was used in creating this article, and all sources are cited and linked where possible.

A couple getting advice about the best mortgage rates in Canada.

When searching for your first home, here are five tips to ensure you get the best mortgage rates in Canada. And, to get the best rates will require you to research so you know how to select a mortgage that’s right for you. Many newcomers arrive with savings to own a home and establish roots in Canada. And getting the best mortgage rate can save you thousands of dollars over the course of your mortgage.

Buying your first home in Canada is an exciting time to make your dream of homeownership a reality.  But at the same time, it can create stress and confusion. You may have questions about the real estate process in Canada, the lending process, or other important questions. And, buying a home is likely the largest and most important decision that you will make. So, it’s important to understand what’s involved, and how you can save thousands of dollars with the best mortgage rate.

Tips to Get the Best Mortgage Rates in Canada

Tip 1. Do Your Research

A home purchase is a major investment. So, spend some time researching the housing market in Canada and the lending and real estate process. Do your research so that you’re confident with the decisions you’ll have to make every step of the way. And, this includes understanding the different types of mortgages:

Tip 2. Save for Your Down Payment to Get the Best Mortgage Rate

Your down payment is money you pay towards your home purchase. It is deducted from the purchase price of your home. And, the remaining amount will be covered by your mortgage loan.

A 2019 survey conducted by Royal LePage revealed that 75% of newcomers arrive in Canada with savings to purchase a home. And the great news is that those savings can help you to get the best mortgage rate.

If you can pay 20% or more of the property value, you can get a conventional mortgage loan. But, with less than 20% of your down payment, you’ll get a high-ratio mortgage. And, high-ratio mortgages require home buyers to purchase mortgage default insurance. This mortgage insurance allows homebuyers to buy a home with less than a 20% down payment of the purchase price.

However, mortgage insurance only protects your lender. Therefore, it’s important to understand the terms and conditions of mortgage insurance if you’re unable to pay your mortgage.

Homebuyers require a minimum down payment of 5% of the home purchase price. So, if you have less than 5%, keep saving!

Clearly, when you have a bigger down payment it can save you money over the lifetime of your mortgage. But, if you have less than 20% of the purchase price, your lender will require you to pay for mortgage insurance.

[cjtoolbox name=’Buying A Home As A Newcomer Webinar’]

Buying your first home in Canada

Savings in Canada: Helping Newcomers Invest

Building Credit History in Canada

Banking and Finance in Canada: Your Financial First Steps

Tip 3. Improve Your Credit Score

There’s nothing like a poor credit score to stand in the way of getting the best mortgage rates in Canada. The minimum required credit score to get a mortgage in Canada is between 620 – 679. But, with a good credit score (usually between 680 – 724 points), you may get better borrowing rates.

Although, even if you have a good credit score, it’s wise to practice good financial habits to increase your ability to borrow money. For example:

Tip 4. Get Professional Advice about Mortgage Rates

If you’re a first-time homebuyer, working with a mortgage broker can help you to navigate the complexity of mortgage products, options, and features. A mortgage broker can access a broad range of financing options.

Buying your first home in Canada can come with uncertainty about unexpected costs, affordability, or paying too much for your home. And, you’ll likely have questions that a mortgage broker can answer.

A professional mortgage broker can inform you about the variety of mortgage options and features. Because different mortgage options may be more suitable for you based on your needs and future plans. For example, you will need this information to help you make decisions related to:

In addition to knowledge and experience, mortgage brokers:

Lenders may have important restrictions related to each mortgage option, and that may end up costing you more money. Working with a mortgage broker can save you thousands of dollars in your overall costs.

Tip 5. Get Pre-approved for a Mortgage

When searching for your new home, it’s difficult to predict if mortgage rates will increase or decrease. So, a pre-approved mortgage can protect you against interest rate hikes while you search. With a pre-approved mortgage, you can lock in a mortgage rate for up to 120 days.

In addition, getting pre-approved will help you understand how much you can afford to buy your first house in Canada.

Do I Need a Mortgage Broker?

Female mortgage broker showing a young couple a presentation on a laptop computer.
Mortgage brokers work on your behalf to get you the best possible rate.

You can get a mortgage from your bank or a mortgage broker. However, working with a broker who is a subject matter expert with specialized mortgage knowledge can offer several advantages. For example, you can:

A broker works with several lenders including top banks, credit unions, and other lenders to get you a more flexible deal. And with one single mortgage application, they get several lenders to “bid” for your business to get you the best possible rate.

In addition, a mortgage broker acts as a single point of contact who can manage everything from applying for the mortgage to negotiating your rate and disbursing the funds. All of this can create a stress-free experience, especially if you’re unfamiliar with the process.

Key Takeaways:

Establishing roots in Canada through homeownership is exciting! Achieve your dream with the best mortgage rate to save you thousands of dollars for your mortgage.

For more information and resources, visit our Banking in Canada: Financial First Steps Resource Page.

When you first move to Canada, it is very likely that you will have a rental house or apartment before you buy a home. Renting a house has many benefits over owning one, especially for newcomers. Not only is renting a home cheaper but it also gives you the flexibility to move to another area. Renting your first home in Canada will also allow you to find the best locations in the city before buying a house.

Even if you don’t own the home, treat a rental like it’s your home to create a happy and pleasant oasis. These maintenance tips will help you keep your rental in top condition. And your landlord plays a key role. A great landlord will ensure that you get any repair or maintenance jobs done quickly. Understanding who is responsible for specific maintenance activities can help you to work together and avoid conflict.

Work with Your Landlord to Keep Your Rental House in Good Condition

While you are renting, it’s important to keep your home in a liveable condition. While you may not own the rental, you want to make it a pleasant environment. So it’s important to work together with your landlord to keep your rental house in a safe, clean, and liveable condition. Remember, the landlord cares about your rental home as much as you do. So it’s in the best interest of both you and the landlord to maintain it well. This will also serve to build a good relationship with your landlord! And a glowing reference from a landlord about how well you take care of their property can be helpful if you move to another rental house in the future.

Take an Active Role in Maintaining Your Rental House

Keeping your rental house or apartment in good shape requires the full involvement of both you and your landlord. Your landlord is responsible for keeping your rental home in good shape but they cannot do that without your help. For example, if you notice a leak in the ceiling or the washing machine stops working, it is a good idea to contact the landlord right away. Your landlord will come within a few days at an agreed time to fix the issue. Small repairs can become very expensive problems if not resolved quickly. So your landlord will appreciate you reporting issues early!

There is a good chance your landlord knows the rental home better than you do. They might have renovated it or even lived in it in the past. Because of this, it is a good idea to allow the landlord to come for regular home inspections. Your landlord might see a major fault that you missed such as poor drainage that could cause your walls to rot. These faults can easily be avoided ahead of time if spotted and there is a high chance your landlord will spot one of these faults during an inspection.

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What Maintenance is Your Landlord Responsible For?

It is also important to know the responsibilities of your landlord. Knowing this will make sure that the relationship between you and your landlord remains equal and cannot be exploited. Your landlord is responsible for maintaining your rental home and making sure it remains in a good, liveable condition. This includes making sure that the rental meets municipal standards and has no faults such as plumbing leaks or appliance breakdowns. Your landlord is responsible for completing maintenance jobs as soon as they arise.

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Another responsibility your landlord has is repairing or replacing any appliances that came with the rental home. However, you may have to pay for the cost of repairing any appliances if you or your guests caused the damage. Or if you rent a furnished home or apartment you are responsible for any damage to the contents. For example, if you break a table that came with the rental home, you will be responsible for fixing or replacing it. However, if the repairs are due to normal wear and tear, the landlord will cover them.

The landlord is also responsible for any heating, plumbing or electricity repairs in your rental home. Utilities, such as water, electricity, and internet may or may not be covered by your landlord. This is something that you will discuss with your landlord before you move into your rental home. These details will also be outlined in your rental house lease agreement.

Keep in mind that most municipalities have by-laws that set minimum standards that landlords must meet related to utilities. So be sure to visit your municipality’s website to learn more.

Your landlord may ask you to enter your rental home or apartment from time to time to inspect its condition or do repair jobs. And as long as they inform you ahead of time, you must legally allow your landlord to enter. However, they must tell you ahead of time, when and why they will be coming. If the timing doesn’t work for you, you can ask to arrange another time. 

Deal with Emergencies in Your Rental House

If you experience an emergency, for example, water starts leaking through your ceiling or roof, or your furnace breaks down in the winter, contact your landlord immediately. Leave a message and note the date and time of your call if you’re unable to reach your landlord. However, if repairs must be performed immediately to protect your health and safety or to prevent property damage, you may be able to authorize the repair work yourself. In this case, be sure to keep all documentation related to the repair and ask the repair company to bill your landlord directly. Or, if you pay any bills, keep track of your expenses so that your landlord can reimburse you.

Why Should You Permit Entry to Your Landlord?

There are laws concerning tenant rights and giving tenants the freedom to enjoy their rental house without the landlord interfering. However, your landlord does have the right to enter your rental to inspect or do repairs. Each province has its own slightly different laws but the idea is the same. As long as your landlord gives you a 24-hour notice before coming, they can enter your rental.

And really, even if the law didn’t support it, there is no reason to deny entry to your landlord as long as they have a valid reason. Your landlord wouldn’t want to harm your home. After all, even if your landlord isn’t living in your rental home, they still legally own it.

Learn more about your rights as a new renter. For more helpful information about rental housing, be sure to check out Rentals for Newcomers.

When Will the Landlord Need Access to Your Rental House?

There are times when your landlord may need to access your rental house. Here are two common reasons and what it means for you, the renter.

1. Conduct Regular Inspections

A conscientious landlord will conduct home inspections once or twice a year. There could be major faults in your rental house that you do not identify. There is a good chance that your landlord will find one of these faults and arrange a time with you to come fix it.

2. Complete General Repairs and Maintenance

The most common reason your landlord will want to enter your rental home is for general repairs and maintenance. This could be anything from replacing an outdated appliance to fixing a clogged drain. As mentioned above, the landlord will complete most maintenance jobs. However, some maintenance responsibilities may fall to you as the tenant. To learn more about how maintenance responsibilities are shared in Ontario, click here. Keep in mind that each province has its own rules and regulations regarding laws on maintenance responsibilities. However, most provinces have many common tenant/ landlord laws.

There are laws concerning tenant rights and giving tenants the freedom to enjoy their rental house without the landlord interfering. However, your landlord does have the right to enter your rental to inspect or do repairs. Each province has its own slightly different laws but the idea is the same. As long as your landlord gives you a 24-hour notice before coming, they can enter your rental.

And really, even if the law didn’t support it, there is no reason to deny entry to your landlord as long as they have a valid reason. Your landlord wouldn’t want to harm your home. After all, even if your landlord isn’t living in your rental home, they still legally own it.

Learn more about your rights as a new renter.

Keep Your House in Safe Condition with these Smart Tips

Fire Prevention Tips

Keeping your rental in top living condition will ensure that you are safe, secure, and comfortable. And working with your landlord to achieve this goal will provide benefits for both you and your landlord!

For more information, tools, and free webinars about rental housing in Canada, be sure to visit Rentals for Newcomers.

what mortgage can I afford

The question “how much mortgage can I afford?” is quite different from “how much mortgage can I get?” So, it’s important to understand the risks involved when a lender offers you a mortgage that is more than you need or expected. When buying a home for the first time, it’s important to consider all of the related costs and expenses. And, when you factor in all of the costs, you’ll be in a better position to answer, “how much mortgage can I afford?”

It may seem like great news to get approved for a higher mortgage amount than you expect. But, this can lead to overspending on housing when you get more money than you need.

The Key Question: How Much Mortgage Can I Afford?

Buying a home in Canada is a big dream for many newcomers! But, buying a home that is more than you can afford, can turn that dream into a financial nightmare. If you have a good credit history, and a healthy down payment, your lender may approve you for a mortgage that is higher than what you need.  For example, you may have a personal budget of $800,000 to buy your home. And, your lender may pre-approve you for $1,000.000. To get a general idea of how much mortgage you can afford, use this mortgage calculator.

But, does that mean you should borrow that much so you can buy a more expensive home?  You need to factor in other costs so that you can answer this key question: how much mortgage can I afford?

This is a common mistake that many first-time homebuyers make. And, this often leads homeowners to a situation where they are “house rich and cash poor”. In other words, they are spending between 30 – 40% (or more) of their total income on:

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When you spend too much of your income on housing, it means you’ll be “cash poor”.  And this means you’ll have very little room to afford other expenses such as: 

Or, you end up making these purchases on credit, increasing your debt level, and possibly affecting your credit history.

buying a home and decorating

In addition, you need to consider your other expenses such as daycare, saving for retirement, or saving for your children’s education. All important expenses that you may also be saving for.

So, before buying your home, carefully consider how much you can afford and what other financial obligations you have.

Costs to Include When Asking: How Much Mortgage Can I Afford?

Closing costs are typically paid at the end of the homebuying process. Often, people overlook the closing cost that can become expensive. You can expect to pay closing costs in the range of 1.5 – 4 % of the selling price of your home. So, it’s important to include these costs when calculating how much mortgage you can afford.

Closing costs are one-time only expenses that may include:

Home Inspection Fee:

Getting a home inspection is not required. However, if you are buying a home, it may be a smart thing to consider. A home inspection can provide you with information about the state of the house. You may discover that you will have to spend money on repairs either in the short-term or long-term. 

You also want to find out what recent repairs or renovations were completed. A home inspection can provide information about the: insulation; electrical work; and structure.

If the home inspection reveals costly defects, you can try to negotiate with the seller to make the repairs or reduce the selling price.

Property Taxes: 

Homeowners in Canada must pay taxes to fund services such as police and fire, schools, public education, transit, parks and recreation, road maintenance, and many other services. And, property taxes are a major source of revenue for municipalities in Canada.

On top of your mortgage payments, you will have to pay property taxes. Most lenders will collect the property tax and this helps you to avoid a large and unexpected tax bill when your annual taxes are due. So, it’s important to factor your property taxes into your mortgage payments as well.

These legal costs include fees for services that your real estate lawyer will do such as:

Land Transfer Fee:

This is a tax that home buyers in most provinces must pay. And, It is usually based on the purchase price of the home.

Property Insurance

Since your lender has a large stake in your home, they will often require you to purchase insurance against fire and weather-related damage. It is also a good idea for you to purchase ‘contents’ insurance to protect your valuables.

Mortgage Life Insurance

This is special insurance coverage to cover the cost of your mortgage in the event of death or severe illness is available from most lenders.

Moving Costs:

Your moving costs will vary depending on whether you rent a truck and move your belongings yourself, or if your hire professional movers. If you hire movers, you can expect to pay a minimum of $1,000 depending on the weight of your belongings, travel distance, and even your moving date.

You can reduce your moving costs if you rent a truck, and kindly ask your friends and family to lend you a hand on moving day!

Utility Bills: 

When you set up your utilities, you will be charged a deposit to hook up services and replace the previous owner’s name with your name on the bill.

Many potential homeowners overlook these additional costs, and they can quickly add up. So it’s important to include these costs when considering how much mortgage you can afford.

Key Takeaways from How Much Mortgage Can I Afford?

It’s important to manage all of the costs involved when buying a home. And, knowing how much mortgage you can afford can help you to make the best financial decision for you and your family.

Check out our financial first steps resource page for resources and information to help you achieve your financial goals in Canada!

Rights as a renter

Knowing your rights as a renter in Canada is essential. When you arrive in Canada, renting suitable housing will be a top priority. And knowing your rights as a renter will ensure that you can enjoy your home free from hassles.

Newcomers to Canada often rent homes for a while before they buy a home.  As a newcomer, it’s essential to know:

Renting a home in Canada can be a daunting task. When searching for a rental home, you’ll find that some listings are detailed while others can be ambiguous so it’s important to gather all the information you need. Our Rentals for Newcomers site is a practical and easy-to-navigate site to help you make an easier transition to life in Canada when it comes to finding housing! And you can even determine the average cost of rentals in each city. This is helpful since rental prices change often.

Important Questions to Ask the Landlord

It’s good practice to ask landlords questions about the property before you rent it. This can clarify any doubt and prevent misunderstandings in the future. Here are some important questions to ask before you rent the property: 

Moving homes can be expensive. So it’s important to ask the right questions to help you decide if you can afford the property and want to rent it.

Know Your Rights as a Renter

Each province and territory has Landlord and Tenant legislation and the rules and regulations vary by province.  For example, in Ontario, Canada’s largest province, the legislation is called the Residential Tenancies Act. This legislation is in place to protect renters.

Learn more about how to search for rental housing in Canada. Join our free webinar.

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The Landlord and Tenant Board in Ontario provides information about the  Residential Tenancies Act in Ontario and aims to resolve disputes between landlords and tenants. In this way, the tenant has a say and can be heard. And this is an important benefit to renters. The site provides free and accurate information for renters.

Of particular help is a list of various forms that landlords and tenants can use for things such as:

There are specific guidelines when it comes to giving notice. For example, a tenant has to give their landlord a formal written notice using Form N9. This form indicates that you plan to end your tenancy and vacate the property. In Ontario, you must give a minimum notice of 60 days that you intend to leave.

It might seem confusing, so it’s helpful to become familiar with the laws in the province where you live related to your rights as a renter. When you know your rights as a renter, this will protect you from landlords taking advantage of you.

To start, look up the rental laws for the province you wish to locate and visit their website.

Landlord Tenant Boards in Canada:

Alberta: Residential Tenancies Act

British Columbia:  Residential Tenancies

Manitoba: Residential Tenancies Branch

New Brunswick: Residential Tenancies Tribunal

Newfoundland: Landlord & Tenant

Nova Scotia: Residential Tenancies Program

Ontario: Landlord and Tenant Board

Prince Edward Island: Landlord and Tenant Act

Quebec: Régie du Logement

Saskatchewan: Landlords and Tenants

Responsibilities and Rights as a Renter or Landlord

It’s helpful to become familiar with your responsibilities and rights as a renter and those of the landlord. The landlord is the owner of the house or building that you live in. If you rent in a large building such as a condo or apartment complex, there may be a property manager or superintendent to collect rent and manage the building. 

Vancouver, False Creek

Landlord and tenant responsibilities can vary in different provinces and territories. So it’s important to review the requirements for the province or territory where you plan to rent a home.

Tenant Responsibilities:

Here are some of the key tenant responsibilities:

Tenants are not allowed to:

Landlord Responsibilities:

Here are some of the key landlord responsibilities:

Landlords are not allowed to enter the property without providing notice and receiving the tenant’s permission.

Signing a Lease

Once you find your new home, the next step is to sign a lease with your landlord. The lease allows you to live in a home for which you pay rent. 

A lease is a written rental agreement outlining the terms you and your landlord agree to.  A lease is a legal document, so it’s important that you read and understand it.  You can ask someone to go over it with you, such as a relative, friend, staff member at an immigrant-serving organization, or even a lawyer.

When you sign a lease, you share personal information with the landlord. Signing a lease gives the landlord consent to collect personal information and use it for renting purposes only. Landlords must comply with the Personal Information Protection and Electronic Documents Act (PIPEDA). PIPEDA is Canada’s federal private-sector privacy law.

Most leases include:

What Landlords Can Ask You:

Landlords can legally ask:

Landlords cannot ask you:

Rent Increases and Rights as a Renter

Notice of Rent Increase

When you renew your lease, your landlord may increase the rent to offset rising maintenance costs. The landlord can increase the rent at the time of renewal. However, it must be within the province’s rental increase guidelines. To learn more about the provincial rent increase guidelines, click on the links provided in the section: Landlord Tenant Boards in Canada.

One of your rights as a renter is that the landlord must provide you with written notice 90 days before the increase takes effect.

Rents tend to remain the same during the term of the lease. However, a landlord can submit an application to the Board for rent increases during the lease term if the taxes, utilities, and operating costs have increased significantly.

When you know more about renting a home in Canada, you can select housing that best meets your needs. And, knowing your rights as a renter will allow you to live peacefully and with few hassles. Because moving can be expensive it’s important to select the right rental property to save additional moving expenses.

For more information about settling in Canada, check out our upcoming webinars!