The Ultimate Step-by-Step Guide to Buying a Home in Canada (2025)
Ultimate Guide to Buying a Home
Welcome to your complete guide to buying a home in Canada.
Whether you are buying your first condo in a bustling city center or your forever home in a quiet suburb, the process of purchasing real estate in Canada follows a consistent, proven path. Our goal is simple: to help you find the right property for the best possible price, with the least amount of stress.
As of 2025, the Canadian real estate market is more dynamic than ever. From understanding the latest mortgage stress test rules to navigating new first-time buyer incentives like the FHSA (First Home Savings Account), being informed is your greatest advantage.
This guide will walk you through the five core phases of the buying process, providing a complete overview and linking you to detailed resources every step of the way.
Phase 1: Financial Readiness & Pre-Approval
Before you start browsing listings, you need to build your financial foundation. In Canada, this means understanding three critical numbers: your credit score, your down payment, and your “stress test” affordability.
1. Credit Score: The Gatekeeper
Your credit score determines not only if you can get a mortgage, but how much interest you will pay. In Canada, a score above 680 is generally considered “good” and will qualify you for the best rates with major lenders. If your score is below 600, you may still qualify, but you might need to work with alternative lenders or focus on credit repair first.
2. Saving Your Down Payment (The 5% Rule)
The minimum down payment in Canada depends on the purchase price of the home:
- Homes under $500,000: You need 5% of the purchase price.
- Homes between $500,000 and $999,999: You need 5% of the first $500k, plus 10% of the remaining balance.
- Homes over $1 Million: You need 20% down.
Pro Tip: If you put down less than 20%, you will need to pay for Mortgage Default Insurance (often called CMHC insurance). This is added to your mortgage balance.
3. The “Stress Test” (B-20 Guideline)
Even if you have a great down payment, you must pass the federal “Stress Test.” Lenders must prove you can afford your mortgage payments if interest rates rise. They will test your finances at your contract rate + 2% (or 5.25%, whichever is higher). This ensures you are safe even if the market changes.
Ready to see what you can afford? Don’t guess. Get a clear picture of your budget by using our tools to calculate your payments and see current rates.
Phase 2: Assembling Your Expert Team
Real estate is a team sport. In Canada, the buying process involves legal contracts, large financial transfers, and complex negotiations. You should never try to do it alone. The good news is that for most buyers, the most valuable professional help is available at no direct cost to you.
1. The Real Estate Agent (Buyer’s Agent)
Your most important partner is your REALTOR®. A common misconception among first-time buyers is that they can save money by going directly to the “listing agent” on a For Sale sign. This is a mistake.
The listing agent works for the seller and is contractually obligated to get them the highest price. You need an advocate in your corner.
- What they do: They find properties (even ones not on MLS®), book private showings, draft legally binding offers, and negotiate the price and conditions on your behalf.
- The Cost: In the vast majority of Canadian real estate transactions, the Buyer Agent’s commission is paid by the Seller. This means you get full professional representation for free.
2. The Mortgage Professional
While your bank can offer you a mortgage, a Mortgage Broker can often offer you more options.
- Bank Specialist: Can only offer you products from their specific bank (e.g., TD, RBC, Scotiabank).
- Mortgage Broker: Can shop your application around to dozens of different lenders (major banks, credit unions, and mono-line lenders) to find you the absolute lowest rate and best terms.
Pro Tip: Don’t just look at the interest rate. Ask your mortgage professional about “Pre-payment Privileges” (can you pay it off faster?) and “Penalties” (what happens if you break the mortgage early?).
3. The Real Estate Lawyer (or Notary)
You don’t need to hire them yet, but you should have one in mind. In Canada, you cannot buy a home without a lawyer or notary to handle the title transfer and funds. They are the “goalie” who ensures you don’t inherit any of the previous owner’s debts or legal issues.
Need a recommendation? We work with the top-rated real estate agents and mortgage brokers in every major market. Don’t guess—work with the best.
Find a Local Expert in Your City:
Phase 3: The Search & The “Smart” Strategy
Many buyers make the mistake of just “browsing” and reacting. In a competitive market, you need a strategy. The most important part of your search is separating your “Wants” from your “Needs.”
1. Defining Your Criteria
- Must-Haves (Non-Negotiable): Number of bedrooms, garage, specific school district, yard size.
- Nice-to-Haves (Negotiable): Granite counters, hardwood floors, finished basement.
- Deal-Breakers: Backing onto a busy road, power lines, structural issues.
Tip: Be willing to compromise on the “cosmetic” items (like paint and carpet) to get the “structural” items (like location and layout). You can change a kitchen; you can’t move the house.
2. Using Your Online Search Tools
Don’t rely on outdated sites. Use a direct IDX feed (like the one on this site) which pulls data directly from the MLS® system in real-time.
- Set Up Alerts: Be the first to know when a home hits the market.
- Drive the Neighbourhoods: Photos can be deceiving. Drive through your target areas at different times of day (morning commute, evening, weekend) to get a true feel for the community.
Ready to start looking? Browse active listings in Canada’s top markets right now.
Phase 4: The Offer & The Deal
Once you find the right home, things move fast. In Canada, making an offer is a formal, legally binding process. Your REALTOR® will draft a Contract of Purchase and Sale. Here is what you need to know about the key terms.
1. The Price
In a balanced market, there is often room for negotiation. In a seller’s market (like Calgary or parts of Edmonton recently), you may need to offer list price or higher. Your agent will pull “comps” (comparable sales) to help you decide on a fair number.
2. The Conditions (The “Subject To” Clauses)
Never make a “firm” offer unless you are 100% certain. Most offers include conditions that protect you.
- Financing Condition: Gives you 5-10 business days to get final mortgage approval from your lender.
- Inspection Condition: Allows you to hire a professional inspector. If they find major issues, you can back out or renegotiate.
- Condo Document Review: If buying a condo, this condition lets a specialist review the condo board’s finances and meeting minutes to ensure the building is healthy.
3. The Deposit
This is often confused with the down payment.
- The Deposit is a “good faith” payment you make when the offer is accepted (usually within 2-3 business days).
- It is held in a trust account until closing.
- It typically ranges from $5,000 to $20,000 (or 5% of the purchase price in expensive markets).
- Important: This money forms part of your down payment. It is not an extra fee.
4. Possession Day
This is the date you get the keys! In Canada, this is usually 30 to 90 days after you make the offer, but it can be negotiated to fit your schedule.
Have questions about the process? Our team of experts can walk you through every clause and condition so you are fully protected.
[ Contact a Local Agent ] [ Read Our Offer Strategy Guide ]
Phase 5: Closing the Deal & Moving In
You have an accepted offer! The sold sign is up, but the deal isn’t “closed” until the money changes hands and the title is registered in your name. In Canada, this process is handled almost entirely by lawyers.
1. The Lawyers Take Over
About 2-3 weeks before possession, your lawyer will contact you to sign the final mortgage documents.
- Their Job: They ensure the property is free of debts (liens), transfer the mortgage funds from your lender to the seller, and register your name on the land title.
2. The “Rest” of the Money
A few days before closing, you will need to provide your lawyer with a bank draft for the Balance of the Down Payment (Total Down Payment minus the Deposit you already paid) plus your Closing Costs (legal fees, adjustments, etc.).
3. Title Insurance
Your lawyer will likely recommend (or your lender will require) Title Insurance. This is a one-time fee (usually $250-$500) that protects you from property fraud, survey errors, and encroachments (like a neighbour’s fence being on your land). It is highly recommended.
4. Possession Day (The Best Day)
On the official closing day, you don’t get the keys at 9:00 AM.
- Your lawyer sends the money to the seller’s lawyer.
- The seller’s lawyer confirms receipt (usually around noon or early afternoon).
- They authorize the release of keys.
- You get the call! Your agent will meet you at the property to hand over the keys to your new home.
Conclusion: Your Journey Starts Here
Buying a home in Canada is a big process, but it follows a predictable path. By building your team (Agent and Mortgage Broker) first and securing your financing early, you remove the stress and focus on the excitement of finding the perfect place to live.
Don’t leave your biggest financial decision to chance.
Start Your Search Today:
[ Browse New Listings in Edmonton ] [ Browse New Listings in Calgary ]
Your Expert Partner
Navigating this entire process is why our clients hire us. It’s our job to manage every detail, provide expert advice, and get you the best possible result. Learn more about the value we provide in our guide: Why Use a Realtor®?
What Our Clients Are Saying
u0022Matt is an expert negotiator and didn’t stop working until my property sold for what I wanted. My property was sold during the pandemic as well. I think that alone speaks volumes for his dedication.u0022
u0022We had the pleasure of working with Matt u0026amp; Melanie… They are a very ambitious duo, who were always willing to work hard on our behalf… I highly recommend to anyone looking for a realtor!!!u0022
u0022The Matt Ferguson real estate team got me the house of my dreams within my budget! Will be forever grateful for this amazing team and all their hard work!u0022
u0022Matt Ferguson and his team have been wonderful and have helped me find my dream home. I would recommend them in a heartbeat… very professional and responsive.u0022
u0022Matt and his team made the selling process so easy and stress-free. From the initial consultation to the final closing, everything was handled with professionalism.u0022
u0022As a first-time home buyer, I was incredibly nervous. Matt walked me through every step of the process with patience and expertise. I couldn’t have done it without him.u0022
u0022Highly recommended. The team’s knowledge of the Edmonton market is second to none. They helped us find a great investment property that cash-flowed from day one.u0022
u0022True professionals from start to finish. They gave us honest advice about pricing and preparation, and it paid off. Our house sold in a week for over asking price.u0022
u0022The communication was fantastic. We were never left wondering what was happening. Matt was always available to answer our questions, no matter how small.u0022
u0022We were relocating to Edmonton and knew nothing about the city. Matt’s team was an incredible resource. They helped us find the perfect family-friendly neighbourhood and a home we love.u0022
FAQs
If you’re ready to sell or have more questions, you can contact us here.
Why are houses so cheap in Edmonton?
Houses are relatively cheaper in Edmonton compared to other Canadian cities because of its overall lower cost of living, which includes affordable housing, lower taxes, and a strong economy that can support higher salaries. While the housing market is under pressure due to high demand from population growth, it remains more affordable on a national scale.
How much is an average house in Edmonton?
The average house price in Edmonton varies by reporting agency and property type, but it is approximately $452,849 for a typical home or $460,685 for all residential types as of late 2025. A detached home has a higher average of $574,872, while townhouses are in the range of $200,000 to $350,000.
Is it worth buying a house in Edmonton?
Yes, buying a house in Edmonton is potentially worth it due to its affordability, which is significantly lower than in other major Canadian cities, and potential for investment and quality of life. It is especially worthwhile if you plan to stay for five or more years, as buying typically makes more sense for long-term residents.
Where is the cheapest place to live in Edmonton?
The cheapest areas for housing in Edmonton are often found in the north and southeast parts of the city, particularly in older neighborhoods or newer developments in the north.
Is $80,000 a good salary in Edmonton?
Yes, $80,000 is a good salary in Edmonton, as it is significantly higher than the median household income and provides a comfortable living after taxes.
