Your lease renewal is on the counter, the First Home Savings Account you opened three years ago holds $24,000, and you have started reading listings at lunch. Nothing in the market is pushing you to hurry. National home sales in August were 6.9% below the same month in 2025, and average asking rents fell 4.8% in the year to August 2026, to $2,035 a month. Prices have been flat as well, with the national benchmark price 3% lower than a year earlier.
1. A Down Payment With Closing Costs Set Aside
Before an offer goes in, the deposit and the closing costs should both be held in cash. Closing costs cover legal fees, title insurance, an inspection, tax adjustments and any provincial transfer tax. A $500,000 purchase needs a $25,000 minimum deposit, and closing costs add another $7,500 to $20,000 due on the same day.
Couples reach the deposit faster, since each partner can hold a tax-free First Home Savings Account of their own. Joint mortgages made up 70.9% of first-time buyer mortgages in the second quarter of 2026, up from 57.6% in 2016.
A repair fund belongs in the same account. Owners are usually advised to budget 1% to 3% of a home’s value each year for maintenance, or $4,269 to $12,807 on a $426,900 house. Homes more than 30 years old tend to need 2% to 4%, because major systems are closer to replacement.
2. A Credit Score Above 680
Mortgage insurers accept a credit score as low as 600 on an insured loan. Many lenders require 680 or higher, so a score in the low 600s narrows the list of lenders willing to approve the file.
In the second quarter of 2026, the average Canadian with non-mortgage debt owed $22,699, up 2.59% from a year earlier. Younger borrowers owed less and fell behind more often. Canadians aged 26 to 35 carried an average of $17,632, with 2.62% of their balances more than 90 days late,. Across all ages, the national late-payment rate was 1.76%, up from 1.70% a year earlier.
Those balances affect a mortgage application in two places, once through the credit score and again through the monthly payments counted against income. A buyer who pays off a car loan or a credit card balance before applying raises the score and lowers the debt ratio at the same time.
3. A Debt Load Inside the 39% and 44% Limits
Lenders measure two ratios. Housing costs, which include the mortgage payment, property tax, heating and half of any condominium fees, cannot exceed 39% of gross income under the gross debt service ratio. All debt payments combined cannot exceed 44%. For a condominium, a $400 monthly fee uses $200 of the housing limit before the mortgage is counted. Both ratios use the stress-tested payment, which is higher than the payment the buyer will actually make.
Edmonton’s benchmark price was $426,900 in August. The lender’s test payment for buying a home in Edmonton at that price with 5% down is about $2,962 a month. At the 39% limit, that payment alone needs a household income near $91,000, before property tax and heating are counted.
At the big banks’ average five-year rate of about 5.03%, the real payment over 25 years is about $2,460 a month. A first-time buyer can choose a 30-year amortization instead, which brings it to about $2,263. A two-bedroom rental in Edmonton averaged roughly $1,595 in 2026, so ownership in this example costs $670 to $870 more each month, and part of that goes to principal. Apartment condominiums are the cheaper route in the same city, with a median August sale price of $190,000 and 5.1 months of supply on the market.
4. A Documented Income History
For salaried buyers, the large lenders generally ask for three to six months of continuous full-time work. A buyer still on probation may need a letter from the employer confirming permanent status before the file is approved. Lenders usually want that letter dated within the last 30 days, with the start date and salary stated on it.
Self-employed buyers face a longer wait, and most lenders want two years of self-employment in the same line of work. Newer businesses can still qualify, but often with a larger down payment or an alternative lender. Lenders ask for at least two years of Notices of Assessment and personal tax returns, then average the net income across those years. The file usually includes two years of T1 General returns and a T2125 statement of business income, with company financial statements in its place for an incorporated business. If one year was much weaker, some lenders use the lower figure. Large deductions that lower a contractor’s taxable income lower the qualifying income by the same amount.
A buyer is ready on this point when a lender can verify the full income from documents already on file, which leaves out a raise that has not arrived and income promised in next year’s contract.
5. A Plan to Stay Five Years or Longer
Closing costs on the purchase and roughly 5% in selling costs at the other end mean that in most Canadian markets, owning costs less than renting only after five to seven years. Toronto is the exception, where recent estimates put the break-even point at 11 to 14 years. At 5%, selling a $426,900 home costs about $21,345. The same five-year plan gives a buyer room to be selective. Greater Edmonton had 8,042 homes listed in August, 14.9% more than a year earlier, and a typical sale took 41 days. At 3.8 months of supply, the region is still slightly in sellers’ favour but moving toward balance.
A job that may relocate, a relationship that is still new or a family that may need more bedrooms within three years all shorten the horizon. Each of those is a reason to keep renting and keep saving. Five years in the same city and the same home gives an owner time to recover what the purchase and the eventual sale will cost.
A Starting Point Before Any Viewing
Ask a lender for a pre-approval before booking a single showing, since it replaces estimates with the lender’s own figures. Most lenders hold the pre-approved rate for 90 to 130 days, so time the request for when you are ready to make offers. Read the qualifying payment on it before the purchase price.
Put that qualifying payment next to your current rent, then move the difference into a savings account every month for 6 months without touching your deposit. If the transfers go through without strain, you have already been living on an owner’s budget, which is the closest trial run of ownership that renting allows.
