Buyer Guide · 03
The first-time buyer's
reality check
Deposits, closing costs, land transfer tax and every other number nobody mentions until it's due. Ottawa-specific, in plain English.
Part 1 · What you need up front
Minimum down payment
In Canada the minimum is tiered by purchase price:
| Purchase price | Minimum down |
|---|---|
| Up to $500,000 | 5% of the price |
| $500,000 – $1,500,000 | 5% on the first $500,000, then 10% on the rest |
| Over $1,500,000 | 20% of the full price |
Under 20% down, mortgage default insurance (CMHC or equivalent) is mandatory. The premium is a percentage of the loan, usually added to the mortgage rather than paid in cash, but you pay PST on it at closing, in cash, in Ontario.
Deposit: not the same thing
The deposit accompanies your offer and is typically due within 24 hours of acceptance. It sits in the listing brokerage's trust account and forms part of your down payment at closing. It must be liquid and available immediately, not in a locked-in account, not "coming from my parents next week." In Ottawa the deposit is also a negotiating lever: a stronger deposit signals a serious buyer and can win you a property without raising your price.
Part 2 · Ontario land transfer tax
Payable on closing, in cash, calculated on the purchase price in brackets. Good news for Ottawa buyers: unlike Toronto, there is no municipal land transfer tax here , so you pay the provincial one only.
| Portion of price | Rate |
|---|---|
| First $55,000 | 0.5% |
| $55,000 – $250,000 | 1.0% |
| $250,000 – $400,000 | 1.5% |
| Above $400,000 | 2.0% |
First-time buyer refund: Ontario refunds up to $4,000 of provincial land transfer tax for eligible first-time buyers. On a home around $370,000 or less that can wipe the tax out entirely; above that, it comes off the top. Your lawyer normally claims it at closing so you never front the money. Confirm current rates and eligibility with your lawyer, because they do change.
Part 3 · Everything else due at closing
Budget roughly 1.5% to 4% of the purchase price in closing costs on top of your down payment. This is the number that ambushes people.
Part 4 · Programs worth asking about
- First-Time Home Buyer Incentive-type programs and the FHSA. The First Home Savings Account combines an RRSP-style deduction with TFSA-style tax-free withdrawal for a first home. If you have any runway at all, open one.
- RRSP Home Buyers' Plan. Lets eligible first-time buyers withdraw from RRSPs for a down payment, repayable over time. Funds generally must have been in the account 90 days.
- Ontario land transfer tax refund. Covered above. Make sure your lawyer applies it.
- GST/HST new housing rebate. Applies to new builds and substantial renovations, not resale. If you are buying new, ask whether the rebate is already assumed in the builder's price.
Program rules and limits change with every federal and provincial budget. Confirm the current version with your mortgage professional and lawyer before you count on any of it.
Part 5 · What it costs after you move in
The mortgage payment is not the cost of owning. Budget for all of it before you decide what you can afford:
- Property tax: City of Ottawa, monthly or in instalments
- Home insurance, and higher premiums for older wiring, oil tanks or knob-and-tube
- Utilities: hydro, gas, water; ask for twelve months of actuals, not an average
- Condo fees, and what they do and do not include
- Maintenance: a reasonable planning figure is 1% of the home's value per year
- The replacement clock on the roof, furnace, AC, windows and water heater
Get a real pre-approval from a lender or broker who has seen your documents, not a five-minute online estimate. It tells us your true ceiling, holds a rate, and lets you move decisively when the right property appears. Shopping without one wastes months and loses houses.
Part 6 · What it costs to have me represent you
In most residential resale transactions the seller's brokerage offers compensation to the buyer's brokerage, so there is typically no direct cost to you. Where that isn't the case, I will tell you before you see the property and it will be in writing. You will never find out about a fee at the offer table. One more thing: if you are visiting a builder's sales centre, bring me with you or register me on your first visit: representation has to be declared up front, and it costs you nothing.
Twenty minutes on what you want, what it really costs in this market, and whether now is the right time. No pressure and no commitment.
General information for Ottawa-area buyers, current at time of writing. Not legal, tax, mortgage or financial advice. Rates, thresholds and program rules change, and your situation is specific to you. Confirm everything with your lawyer and mortgage professional. Not intended to solicit buyers currently under contract with another brokerage.