How to Buy a Home in Ontario: What You Need Saved, the Credit Score and Income
Buying your first home can feel overwhelming. Before you’ve even looked at a listing, the questions start piling up: How much do I need saved? What credit score do I need? How much do I have to earn?
In this video, Joe Gonzalez, Broker of Record at Right Choice Happenings Realty, answers the three questions first-time buyers in Niagara ask most.
How much money should you have saved?
Your down payment is the biggest piece. In Canada, the minimum down payment on a home priced at $500,000 or less is 5% of the purchase price. On a $500,000 home, that’s $25,000.
On top of that, Joe recommends having roughly $5,000 set aside for closing costs. That covers things like:
- Your real estate lawyer’s fees
- Moving expenses
- Smaller closing adjustments, like property tax or utility prepayments
Closing costs vary from deal to deal, especially once land transfer tax is factored in. First-time buyers in Ontario may qualify for a rebate on that tax. Ask your lawyer for an estimate early so there are no surprises on closing day.
What credit score do you need to buy a house?
Joe’s advice, based on years of working with Niagara mortgage agents: a credit score of around 680 puts you in really good shape.
That isn’t a hard minimum. People buy homes with lower scores all the time. A score in that range simply gives you more lenders to choose from and usually better terms. If your score is lower, a good mortgage broker can tell you what’s possible and what would help most.
How much income do you need to buy a house in Canada?
There’s no single magic number, because it depends on the home’s price, your debts and the interest rate at the time. As a general benchmark, Joe says a household income of around $130,000 is a comfortable spot for buying in today’s market.
As he points out, that’s not easy to reach, and it’s not a hard-and-fast rule. Many buyers purchase with less, especially in more affordable Niagara communities like Welland, Port Colborne and Fort Erie. The best way to know your real number is to get pre-approved before you start shopping.
Your first-time buyer checklist
- Check your credit score and clean up anything you can.
- Save your down payment plus a cushion for closing costs.
- Talk to a mortgage broker and get pre-approved.
- Choose a REALTOR® who works with first-time buyers and will explain every step.
- Start viewing homes in your price range.
Frequently asked questions
Can I buy a house with less than 5% down?
Not usually. 5% is the minimum for homes up to $500,000 in Canada, and the minimum is higher on the portion of the price above that.
Do I need a 680 credit score?
No. It’s a strong target, but buyers with lower scores can still qualify. A mortgage broker can show you your options.
What are closing costs?
They’re the extra costs on top of your down payment: legal fees, land transfer tax, adjustments and moving costs.
Ready to buy your first home in Niagara?
Buying your first home is our specialty at Right Choice. We’ll walk you through every step, connect you with trusted mortgage professionals, and answer every question along the way.
Call us at 289-276-1716 or start your home search.
