A First-Time Homebuyer’s Guide to Securing a Mortgage

Becoming a homeowner is exciting, but for a first-time homebuyer, it can also feel like a maze of terms, numbers, and decisions. If you have ever wondered how to decipher interest rates or simplify mortgage options, you are in the right place.

In this guide, we will discuss the Ontario housing market and break down every step of the home financing journey. By the end, you will understand home mortgage rates and have a clear roadmap to confidently turn your homeownership dream into a reality.

Understanding the Ontario Housing Market

Ontario’s housing market continues to shift, and for a first-time homebuyer, understanding these trends can make all the difference.

As of March 2025, the average resale price in Ontario was $845,200, reflecting a 4.0% year-over-year decline. While this slight dip offers some relief, home financing based on affordability remains a concern for many entering the market for the first time.

In February 2025, the province recorded 9,776 home sales, a 9.7% uptick from January, but still 26.7% lower than February 2024. This indicates cautious optimism: while more buyers are returning to the market, activity remains below peak levels.

Encouragingly, the sales-to-new-listings ratio (SNLR) dropped to 39%, thus giving more leverage in negotiations.

SNLR is a real estate metric that compares the number of homes sold to the number of new listings in a period. A ratio below 40% indicates a buyer’s market, while a ratio above 60% suggests a seller’s market.

For motivated first-time homebuyers, this opens a window of opportunity to act before competition intensifies again.

Why Local Knowledge Matters

In a competitive market, every advantage counts. A trusted mortgage broker in Ontario can assess your needs, explain the latest housing market trends, and clarify regulations. These experts can also create home financing strategies that fit your financial situation.

How to Secure a Mortgage in Ontario

If you are ready to secure your first mortgage, here is everything you need to know before you jump into Ontario’s housing market:

1. Budgeting and financial preparation

Buying your first home starts with knowing your numbers. Here is how to prepare:

• Assess your affordability: Review your income, expenses, and savings. It is also important to factor in your down payment, closing costs, and other upfront fees tied to home refinancing.
• Use mortgage calculators: Estimate monthly payments based on different home mortgage rates. For example, a $500,000 mortgage at a 5.4% interest rate over 25 years would equal $3,000 per month.
• Check your credit score: A higher credit score (over 680) means better home mortgage rates. Pay down debts and avoid new credit to improve your rating.
• Work with a professional: A reliable mortgage broker in Ontario can guide you through the process. They can match you with the right home refinancing strategy that fits your needs.

2. Getting pre-approved

For any first-time homebuyer, getting pre-approved is an important early move. Pre-approval means a lender has reviewed your financial profile and conditionally agreed to lend you a specific amount. It gives you a realistic price range and makes you a more serious buyer in the eyes of the sellers.

To begin, gather key documents like proof of income, employment history, bank statements, and identification. The process helps outline your mortgage options and clarify what first-time homebuyer loans you may qualify for.

A pre-approval is important, especially in Ontario’s fast-moving housing markets. Sellers are more likely to prioritize your offer, knowing your home financing is already in place. This process also reduces uncertainty, as you now know the price range and can lock in favourable home mortgage rates.

3. Evaluating mortgage options

Choosing the right mortgage options is also important. The most common choices are the fixed-rate and variable-rate mortgages, each with its perks and drawbacks.

A fixed-rate mortgage is structured to allow the interest rate and monthly payments to remain the same for the entire term. This provides stability and makes it easier to budget. It’s ideal if you want predictable costs or are concerned about rising home mortgage rates.

In contrast, a variable-rate mortgage has an interest rate that can change with the market. While your payments may stay the same, the portion going toward interest versus principal can shift.

If home mortgage rates fall, you could pay less interest, but if they rise, you might end up paying more overall.

As a first-time homebuyer, you are not limited to fixed and variable mortgage types. Other mortgage options, such as the open and closed choices offer unique advantages.

Open mortgages allow you to pay off your loan early without penalties, but they usually come with high rates.

Closed mortgages have lower rates, but restrict early repayment, which could attract penalties if you break the contract.

4. From paperwork to possession

Next comes the home appraisal, where the property’s value is confirmed to protect the lender’s investment. Legal checks follow to verify the title, and home mortgage rates are finalized based on your credit profile and loan type.

You will also need to arrange for home insurance and prepare for closing costs, which include land transfer taxes, legal fees, and adjustments. To make things easier, you may need support from first-time homebuyer programs.

5. First-time homebuyer programs and incentives

In Ontario, government support programs can make first-time homebuyer entry into the market more affordable.

One of the most popular first-time homebuyer programs is the First-Time Home Buyer Incentive (FTHBI). This federal initiative offers a shared-equity contribution of 5% or 10% of the home’s purchase price, which helps to reduce the mortgage amount without adding interest.

The Home Buyer’s Plan (HBP) is another government support that enables you to withdraw up to $60,000 from your Registered Retirement Savings Plan (RRSP) to use as a down payment. You won’t pay tax on this amount if it is repaid within 15 years.

In Ontario, first-time homebuyer loans are often paired with land transfer tax rebates of up to $4,000. Toronto buyers may qualify for an additional municipal rebate. Some municipalities also provide local grants to help with down payments.

These first-time homebuyer programs lower entry costs and improve access to better mortgage options.

Canadalend Is the Smart Choice for First-Time Homebuyers

Unlike traditional lenders, Canadalend provides access to a wider range of mortgage options, so you are not limited to one product or rate.

Being one of the leading mortgage brokers in Ontario comes with a steadfast commitment, which includes our passion to help every first-time homebuyer navigate the bumpy house market pathway with clarity and confidence.

Our brokers take the time to understand your financial goals and long-term needs. Once this is achieved, we leverage our deep knowledge of home mortgage rates, market trends, and lending criteria to ensure you get the best deal available.

If you are building credit, managing student debt, or just starting your homeownership journey, we are here to help.

Canadalend is not just another mortgage broker in Ontario; we are your partner in making informed financial decisions! Call us today at 1-844-586-0710 or contact us online to schedule a free consultation. We will take care of the rest.