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Buying a House  in Canada: Steps and  Tools to Plan Your Budget  

Buying your first home requires smart financial planning, preparation and of course budgeting. Here’s a list of steps and tools to help you save up for a home, and reach your goal of homeownership.

1. Determine the down payment amount

The first step is to save for a down payment – typically, a minimum of 5% of the property’s value in the case of a house or a condo. The minimum down payment may vary, however, depending on the type of property purchased: duplex, triplex, income property, second home, etc. An independent mortgage broker can help navigate these different terms. 

If your down payment is less than 20% of the purchase price, you will have to insure your mortgage loan. A premium will be added to the calculations and will increase your loan and your payments.

Check out this tool from the Canada Mortgage and Housing Corporation (CMHC) website to get you started on budgeting. 

2. Save for the down payment

Once the purchase price and down payment amount have been established, the next step is to plan your savings strategy. A popular strategy is to contribute a fixed amount periodically to one of the different savings vehicles available, such as the TFSA, RRSP and soon, the FHSA..

Should you invest your savings until you reach your down payment amount? This depends mostly on your investment horizon, i.e., how long it will take you to reach your goal.  I encourage you to contact a professional to discuss this issue.

Here is a second tool to estimate how long it may take to save for your down payment:

3. Anticipate unrecoverable costs

Finally, there are unrecoverable costs, including upfront and recurring costs. 

Unrecoverable costs at purchase include :

  • Welcome tax: calculator
  • Renovations (minor or major)
  • Furniture
  • Notary fees
  • Moving expenses

Recurring costs can include: 

  • Mortgage payments 
  • Annual municipal taxes: calculator *2021 rates available only
  • Annual school taxes: the 2022-2023 rates are $.10240 per $100 of property assessment. (You can use this calculator, which is available in French only.)
  • Repairs
  • Home insurance payments
  • Condominium fees (if applicable)

It is essential to have the necessary funds left over after you have paid your down payment to pay the expenses listed above. When it comes to home ownership, always prepare for the unexpected, as surprise costs can quickly sneak up on you.   


  • Maxime Dubé, M.Sc., CFA
    Maxime holds a Masters degree in Finance from the Université de Sherbrooke and is a CFA charterholder since 2019. He joined the Claret team in 2016 as a junior investment research analyst and was promoted to portfolio manager in 2019.

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