5 Mistakes to Avoid When Buying Your First Home

Buying your first home is one of the most exciting — and nerve-wracking — financial decisions you'll ever make. While the process can feel overwhelming, most costly mistakes are completely avoidable if you know what to look out for.

1. Skipping Mortgage Pre-Approval

Too many first-time buyers start house hunting before they know what they can actually afford. Without a pre-approval letter, you're essentially shopping blind. Worse, in a competitive market, sellers won't take your offer seriously without one.

A pre-approval locks in your rate for 90-120 days, gives you a clear budget, and shows sellers you're a serious buyer. At West Avenue Group, our online pre-approval takes less than 5 minutes and has zero impact on your credit score.

2. Ignoring the Mortgage Stress Test

Since 2018, all Canadian mortgage applicants must pass the "stress test" — qualifying at either 5.25% or your contracted rate plus 2%, whichever is higher. Many first-timers are shocked when their maximum approval is 15-20% lower than expected.

Plan ahead. Use our affordability calculator to get a realistic number before you fall in love with a property outside your range.

3. Forgetting About Closing Costs

The purchase price is just the beginning. Expect to budget an additional 1.5% – 4% of the home price for closing costs. These include:

• Land transfer tax — varies by province (Ontario charges a municipal LTT on top in Toronto)
• Legal fees — typically $1,000 – $2,500
• Home inspection — $400 – $600
• Title insurance — $250 – $500
• Appraisal fees — $300 – $500

The good news? First-time buyers in Ontario can claim a land transfer tax rebate of up to $4,000, and the federal government offers a first-time home buyer tax credit worth $10,000.

4. Not Shopping Your Mortgage Rate

A startling number of first-time buyers simply accept whatever rate their bank offers. This is leaving money on the table. A difference of just 0.25% on a $400,000 mortgage costs you over $12,000 in extra interest over a 5-year term.

This is exactly why mortgage brokers exist. At West Avenue Group, we shop your application across 30+ lenders to guarantee you the lowest rate available — and our service is completely free.

5. Draining Your Entire Savings for the Down Payment

While a 20% down payment avoids CMHC insurance premiums, emptying your emergency fund to hit that threshold can backfire spectacularly. Unexpected repairs, job changes, or rate increases can leave you house-rich and cash-poor.

Sometimes a 10% or even 5% down payment with CMHC insurance is the smarter move. The insurance premium gets rolled into your mortgage, and you keep a healthy financial cushion. Our advisors can model both scenarios for you.