So you’ve been asking yourself the age-old question:
Should I buy a house?
When’s the best time to buy?
What do I need to know before buying?
There’s never a perfect time to buy, but there are a few steps you can take to prepare for homeownership.

Deciding whether it’s the right time to enter the market often depends on you and your financial situation more than the state of the market in any given month.

Here are 6 key factors to consider before buying a home:
1️⃣ You have plenty of savings
2️⃣ You’ve paid off your debts
3️⃣ Your income outweighs your monthly payments
4️⃣ You’re staying put for a few years
5️⃣ You’ve found the right mortgage
6️⃣ You have a good real estate agent

1. You Have Savings on Top of Savings

The number one sign you’re ready to buy a house is having a healthy savings account. Homeownership comes with many costs, and you’ll need money set aside for:
✅ A down payment – 5-10% is common, but 20% or more helps avoid CMHC insurance.
✅ An emergency fund – Covering 4-6 months of expenses is ideal.
✅ Moving costs – Professional movers, truck rentals, and supplies add up quickly.
✅ Closing costs – Typically 3-4% of your purchase price, covering inspections, appraisals, and more.

2. You’ve Minimized or Eliminated Your Debt

It’s tough to save for a home while juggling credit card debt, student loans, or car payments. A mortgage is a big commitment, so being debt-free (or close to it) will make homeownership far less stressful.

3. Your Total House Payment Is Less Than 25% of Your Take-Home Pay

To avoid being house-poor, aim to keep total home expenses (including mortgage, insurance, and taxes) under 25% of your take-home pay.

Breakdown of costs:
🏠 Principal – The amount you borrowed
💰 Interest – What lenders charge to finance your loan
🔒 CMHC Insurance – Required if your down payment is under 20%
🛡️ Homeowners Insurance – Protects against fires, floods, and more
🏡 Property Taxes – Supports schools, law enforcement, and public services

4. You’re Planning on Staying in Your Home

If you plan to stay in your home for at least five years, you’ll likely build enough equity to make it a smart investment.

Equity Formula:
📈 Your Home’s Value – Your Mortgage Balance = Equity

The longer you stay, the more you benefit from appreciation and mortgage payments lowering your balance.

5. You’ve Chosen a Mortgage That Fits Your Needs

Most people don’t pay 100% cash for a home, so a mortgage is essential. A mortgage broker can help you compare rates from different lenders, negotiate better terms, and find the best fit.

Look for a mortgage broker who has:
✔️ Experience & professional credentials
✔️ Positive online reviews & testimonials
✔️ A wide network of lenders
✔️ Transparency & good communication

6. You Have a Good Real Estate Agent

A knowledgeable real estate agent will guide you through the process, negotiate on your behalf, and ensure a smooth transaction.

Key qualities of a great real estate agent:
🏡 Local market expertise
💬 Strong communication skills
🤝 Excellent negotiation skills
🔍 Attention to detail

Final Thoughts

Buying a home is a big step, but if you’ve checked off these six factors, you’re well on your way to becoming a homeowner!

The Bank of Canada today reduced its target for the overnight rate to 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.

The Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth. However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada. The economic outlook continues to be subject to more-than-usual uncertainty because of the rapidly evolving policy landscape.

After a period of solid growth, the US economy looks to have slowed in recent months. US inflation remains slightly above target. Economic growth in the euro zone was modest in late 2024. China’s economy has posted strong gains, supported by government policies. Equity prices have fallen and bond yields have eased on market expectations of weaker North American growth. Oil prices have been volatile and are trading below the assumptions in the Bank’s January Monetary Policy Report (MPR). The Canadian dollar is broadly unchanged against the US dollar but weaker against other currencies.

Canada’s economy grew by 2.6% in the fourth quarter of 2024 following upwardly revised growth of 2.2% in the third quarter. This growth path is stronger than was expected at the time of the January MPR. Past cuts to interest rates have boosted economic activity, particularly consumption and housing. However, economic growth in the first quarter of 2025 will likely slow as the intensifying trade conflict weighs on sentiment and activity. Recent surveys suggest a sharp drop in consumer confidence and a slowdown in business spending as companies postpone or cancel investments. The negative impact of slowing domestic demand has been partially offset by a surge in exports in advance of tariffs being imposed. 

Employment growth strengthened in November through January and the unemployment rate declined to 6.6%. In February, job growth stalled. While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt the recovery in the jobs market. Meanwhile, wage growth has shown signs of moderation.

Inflation remains close to the 2% target. The temporary suspension of the GST/HST lowered some consumer prices, but January’s CPI was slightly firmer than expected at 1.9%. Inflation is expected to increase to about 2½% in March with the end of the tax break. The Bank’s preferred measures of core inflation remain above 2%, mainly because of the persistence of shelter price inflation. Short-term inflation expectations have risen in light of fears about the impact of tariffs on prices.

While economic growth has come in stronger than expected, the pervasive uncertainty created by continuously changing US tariff threats is restraining consumers’ spending intentions and businesses’ plans to hire and invest. Against this background, and with inflation close to the 2% target, Governing Council decided to reduce the policy rate by a further 25 basis points.

Monetary policy cannot offset the impacts of a trade war. What it can and must do is ensure that higher prices do not lead to ongoing inflation. Governing Council will be carefully assessing the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs. The Council will also be closely monitoring inflation expectations. The Bank is committed to maintaining price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is April 16, 2025. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Content Type(s): Press, Press releases
https://www.bankofcanada.ca/2025/03/fad-press-release-2025-03-12/