First-Time Buyer Series, Part 1: Getting Ready to Buy for Markham Condo Buyers
Buying your first home is a big step, and in a market like Markham, a little preparation goes a long way. Welcome to Part 1 of 6 in our First-Time Buyer Series, where we walk through the condo-buying process one step at a time. This first part is all about getting ready: building a realistic budget, understanding down payment basics, checking your credit and getting a mortgage pre-approval before you start touring units.
Start With a Realistic Monthly Budget
The purchase price is only part of the picture. Before you decide what you can afford, add up the full monthly cost of owning a condo:
Your mortgage payment (principal and interest)
Monthly condo fees, which vary widely from building to building
Property taxes
Condo unit-owner insurance
Utilities that the condo fees don't cover, such as hydro or internet in many buildings
Parking or locker costs, if they aren't included with the unit
A practical tip: once you have an estimate, compare it with what you pay in rent today. For a few months, set aside the difference in a savings account. If that feels comfortable, you have a good sense of your real budget, and you've added to your down payment at the same time.
Down Payment Basics
In Canada, the minimum down payment depends on the purchase price. According to the Financial Consumer Agency of Canada, the minimums are:
Purchase price of $500,000 or less: 5% of the price
Between $500,000 and $1.5 million: 5% of the first $500,000, plus 10% of the portion above $500,000
$1.5 million or more: 20% of the price
If you put down less than 20%, you will generally need mortgage loan insurance. The premium is usually added to your mortgage, but in Ontario the provincial sales tax on that premium can't be added to the loan and must be paid when you close. Since December 15, 2024, first-time buyers with an insured mortgage may be able to choose a 30-year amortization. A longer amortization lowers your regular payment, but you'll pay more interest over the life of the loan, so it's worth running the numbers both ways.
Lenders will also want to confirm where your down payment comes from. Keep your savings in an account with a clear paper trail, and if family is helping, expect your lender to ask for a signed gift letter. In Part 2, we'll look at government programs that can help you save faster.
Plan for Closing Costs, Too
Many first-time buyers focus on the down payment and forget the costs due on closing day. Set aside a separate fund for:
Ontario land transfer tax (first-time buyers may qualify for a refund, which we'll cover in Part 2)
Legal fees and disbursements
Title insurance
A home inspection, if you choose to have one
Adjustments for prepaid property taxes or condo fees
The sales tax on your mortgage insurance premium, if applicable
Moving costs and basic furnishings
Check and Strengthen Your Credit
Your credit history affects whether you're approved and the rate you're offered. A few months before you plan to buy:
Request your free credit reports from Equifax and TransUnion and check them for errors
Pay every bill on time, including phone and utility bills
Keep credit card balances well below your limits
Avoid taking on new debt, like a car loan or new credit card, until after you close
Think carefully before co-signing a loan for someone else
Get Pre-Approved Before You Shop
A mortgage pre-approval is a lender's review of your income, debts, credit and down payment. It tells you roughly how much you can borrow, and many lenders will hold an interest rate for a set period. A pre-approval isn't a final commitment: your lender will still need to approve the specific condo and confirm your documents once you have an accepted offer.
Be ready for the mortgage stress test. Federally regulated lenders must check that you could still afford your payments at a rate higher than your actual contract rate. For uninsured mortgages, the Office of the Superintendent of Financial Institutions sets this qualifying rate at the greater of your contract rate plus 2% or 5.25%, and a similar test applies to insured mortgages. Lenders also generally count condo fees in their affordability calculations, so a unit with higher fees can reduce how much you qualify for.
Documents to gather for your pre-approval:
Government-issued photo ID
A recent employment letter and pay stubs
Recent T4 slips and Notices of Assessment (self-employed buyers usually need more history)
Proof of your down payment savings
Details of existing debts such as car loans, student loans and credit cards
Your Getting-Ready Checklist
A monthly budget that includes condo fees, taxes, insurance and utilities
Down payment savings with a clear, documented source
A separate fund for closing costs
Credit reports reviewed and any errors corrected
A mortgage pre-approval in hand
A real estate team that knows Markham condo buildings
Please note: This article is general information only and isn't legal, tax or financial advice. Mortgage rules and programs change, and every situation is different, so please confirm the details with your real estate lawyer, mortgage professional or tax advisor.
Ready to Get Started?
Brant Liu and Sally Jiang, CPA, specialize in Markham condos and work with first-time buyers every week. Whether you're just starting to save or you're ready to book viewings, we'd be happy to offer a free first-time buyer consultation or set up a viewing for you.
Brant Liu: 647-867-0586 | brantliu1018@gmail.com
Sally Jiang, CPA: 647-968-3216 | SallyJiang628@hotmail.com
Coming next in Part 2: First-Time Buyer Programs and Incentives, including the First Home Savings Account (FHSA), the RRSP Home Buyers' Plan, Ontario's land transfer tax refund for first-time buyers, GST/HST rebates on new homes and the Home Buyers' Amount tax credit.
Brant Liu & Sally Jiang, Sales Representatives, T-One Group Realty Inc., Brokerage. This article is for general information and is not intended to solicit buyers or sellers already under contract.
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