Buying a home requires more cash than the down payment alone. Ottawa buyers should plan for the deposit, legal costs, land transfer tax, inspection expenses, moving costs and a reserve for the first few months of…
Buying a home requires more cash than the down payment alone. Ottawa buyers should plan for the deposit, legal costs, land transfer tax, inspection expenses, moving costs and a reserve for the first few months of ownership.
1. Build the down payment
For homes priced at $500,000 or less, the federal minimum down payment is 5%. For homes above $500,000 and below $1.5 million, the minimum is 5% of the first $500,000 plus 10% of the portion above $500,000. Homes at $1.5 million or more generally require at least 20% down.
2. Separate your deposit from your down-payment plan
The deposit is paid after an offer is accepted and becomes part of your down payment at closing. You need access to it quickly, so do not keep every dollar in an account that is difficult to withdraw from.
3. Budget for closing costs
Legal fees, title insurance, land transfer tax, adjustments and inspection costs can add thousands of dollars. First-time buyers may qualify for the Ontario land transfer tax refund, but it is still wise to keep a separate closing-cost reserve.
4. Keep money after closing
Emptying every account to buy the home creates unnecessary pressure. Appliances fail, moving costs creep up and small repairs appear quickly. A post-closing emergency fund makes the transition much easier.
5. Use first-time-buyer accounts strategically
An FHSA can allow an eligible first-time buyer to contribute up to $8,000 of participation room in the first year the account is opened, with qualifying withdrawals for a first home generally tax-free. The Home Buyers' Plan currently allows eligible buyers to withdraw up to $60,000 from an RRSP for a qualifying home. A qualifying FHSA withdrawal and an HBP withdrawal can be used for the same home if the program conditions are met.
A practical next step
A local Ottawa real estate agent can help you turn your budget into a realistic search plan, explain neighbourhood trade-offs and coordinate the buying process with your lender and lawyer.