First Time Homebuyer Guide: Buying Your First Home in London, Ontario

TL;DR: The Ultimate First-Time Homebuyer Guide

• Set Your Budget & Check Your Credit – Determine how much home you can afford and ensure your credit score is in good shape to secure the best mortgage rates.

• Save for Your Down Payment – Take advantage of programs like the First Home Savings Account (FHSA) and the Home Buyers’ Plan (HBP) to save faster.

• Explore First-Time Buyer Incentives – Get money back through the Land Transfer Tax Refund, First-Time Home Buyers’ Tax Credit, and energy efficiency rebates.

• Plan for Additional Costs – Factor in closing costs, mortgage insurance, and moving expenses to avoid surprises.

• Get Pre-Approved & Start House Hunting – A mortgage pre-approval helps you shop with confidence, focusing on homes that fit your budget and lifestyle.

Buying your first home is a huge milestone—congratulations on taking this step! If you’re like most people, you’re probably feeling a mix of excitement and nervousness, wondering where to start and what to expect. Trust me, I get it. As a mortgage agent here in London, Ontario, I’ve walked alongside plenty of first-time buyers just like you, helping them navigate this process.

That’s why I put together this guide. My goal is to break everything down so it feels manageable and maybe even fun. Let’s dive into everything you need to know to buy your first home in London, Ontario.

Where Should You Start as a First-Time Home Buyer?

Step 1: Figure Out Your Budget

The first thing I always tell clients is to figure out your budget. You need to know how much home you can afford before you start scrolling through listings online.

A good rule of thumb is to keep your housing costs (mortgage, property taxes, utilities, etc.) under 30% of your gross monthly income. But how do you figure out how much mortgage can I afford as a first-time buyer? It’s all about looking at your income, debts, and down payment. Once you have those numbers, you’ll have a clearer idea of what’s realistic.

Step 2: Check Your Credit Score

Your credit score plays a big role in getting a mortgage. If you’re in Canada, a score of 660 or higher is what lenders like to see. What to know before buying your first home in Ontario? Checking your credit score is definitely one of those things.

If your score isn’t where you’d like it to be, don’t panic. There are ways to improve it, like paying down debts and making sure you’re not taking on new loans right before applying for a mortgage.

Step 3: Start Saving for Your Down Payment

Now, let’s talk down payments. The amount you need depends on the price of the home:

• 5% for homes up to $500,000.

• 10% for the portion of the price above $500,000.

• 20% for homes over $1 million.

So, if you’re eyeing a $600,000 home, you’d need at least $35,000 (5% of $500,000 plus 10% of the remaining $100,000). Thinking, what is the average cost of buying a home in London Ontario? is a great place to start—it’ll help you set realistic savings goals.

How Can You Save for a Down Payment Faster?

Saving for a down payment might feel overwhelming, but don’t worry—there are tools and strategies to make it easier.

1. Open a First Home Savings Account (FHSA)

If you haven’t heard of the FHSA yet, let me fill you in. This account is a game-changer for first-time buyers. How does the First Home Savings Account work in Canada? Here’s the deal:

• You can contribute up to $8,000 per year, to a lifetime max of $40,000.

• Your contributions are tax-deductible, which means they lower your taxable income.

• The best part? Your savings grow tax-free, and withdrawals are also tax-free if they’re used for your first home.

2. Use the Home Buyers’ Plan (HBP)

If you’ve been saving in an RRSP, you can withdraw up to $35,000 tax-free through the Home Buyers’ Plan. Couples can combine their withdrawals for up to $70,000. What is the

Home Buyers’ Plan, and how can it help first-time buyers? It’s an amazing way to boost your down payment without penalty—as long as you pay it back within 15 years.

3. Automate Your Savings

This one’s simple but super effective. Set up an automatic transfer to a dedicated savings account every time you get paid. Treat it like any other bill. You’d be surprised how fast it adds up when you’re consistent.

What Programs and Incentives Are Available for First-Time Buyers?

The perks of being a first-time buyer in Ontario are pretty sweet. These programs are designed to help you save money and make the process easier.

1. Land Transfer Tax Refund

Did you know Ontario gives first-time buyers a refund on the land transfer tax? What is the land transfer tax refund for first-time buyers in Ontario? Depending on the cost of your new home, you could get up to $4,000 back, which might even cover the entire tax.

2. First-Time Home Buyers’ Tax Credit (HBTC)

The First-Time Home Buyers’ Tax Credit lets you claim up to $10,000 for the purchase of a qualifying home. How does the First-Time Home Buyers’ Tax Credit work in Canada? This means a $1,500 tax refund, which can come in handy for moving costs or new furniture.

3. Energy Efficiency Rebates

If you’re buying a home that could use some updates, check out programs like the Canada Greener Homes Grant. They can help with costs for things like energy-efficient windows, insulation, or heating systems.

What Costs Should You Plan For?

Buying a home isn’t just about the down payment—there are other costs you’ll need to budget for, too.

1. Closing Costs

How much are closing costs for first-time home buyers in Ontario? These usually range from 1.5% to 4% of the home’s purchase price and include:

• Legal fees.

• Home inspection fees.

• Title insurance.

• Land transfer tax.

Plan for these upfront so they don’t catch you off guard.

2. Mortgage Insurance

If your down payment is less than 20%, you’ll need mortgage default insurance (often called CMHC insurance). It’s added to your mortgage and protects the lender in case you default. "What is mortgage insurance, and do I need it?"

3. Moving and Setup Costs

Don’t forget about things like hiring movers, setting up utilities, and buying any furniture or appliances you might need.

How Do You Get Pre-Approved for a Mortgage?

Getting pre-approved is one of the most important steps in the home-buying process. It shows sellers you’re serious and helps you focus on homes within your budget.

What Do You Need for a Pre-Approval?

Here’s a quick list of what lenders usually ask for:

• Proof of income (like pay stubs or T4s).

• A list of your assets and debts.

• Details about your down payment.

Once you’ve got all this ready, the process is pretty straightforward.

What Should You Look for in a Home?

Shopping for a home is the fun part, but it’s important to stay focused on what matters most.

Location is Key

Think about proximity to work, schools, parks, and other amenities. Best neighborhoods for first-time home buyers in London, Ontario include areas like Old East Village, Byron, and Stoneybrook.

Your Needs vs. Wants

Make a list of what you need now and what you might need in the future. Do you plan to grow your family? Will you need a home office? Prioritize features that make sense long-term.

How Do You Make an Offer on a Home?

When you’ve found "the one," it’s time to make an offer. This includes:

• The price you’re willing to pay.

• Conditions like financing or home inspections.

• A proposed closing date.

How to make an offer on a house as a first-time buyer is something your real estate agent will help with, so don’t worry—you’re not on your own.

Ready to Become a Homeowner?

Buying your first home in London, Ontario, might feel like a big challenge, but it’s totally doable with the right planning and support. From figuring out your budget to making that final offer, every step brings you closer to owning a place you can call your own.

If you’re ready to get started or have questions along the way, I’m here to help. Let’s make your dream of homeownership a reality.