First-time homebuyers stretching to the max: CMHC

James DeVuyst • October 18, 2018

The vast majority (85 per cent) of first-time buyers are spending the maximum they can possibly afford on their first home purchase, reveals a Canada Housing and Mortgage Corporation (CMHC) survey released October 18.

That compares with 68 per cent of repeat home buyers stretching their budgets to the max, according to the survey of 4,000 Canadians who took out a mortgage in the past year.

Of all homebuyer respondents (not including mortgage renewer respondents), 43 per cent said they spent more on their new home than they had planned.

Affordability was the number one concern of first-time buyers, with more than twice as many first-timer respondents citing this as their biggest factor in choosing a home, compared with other factors such as location and condition of the property.

However, 76 per cent of first-time buyers said they were confident that they would be able to service their mortgage payments.

And despite their concerns over home price and affordability, nearly two-thirds of first-time buyers said they were not concerned by rising interest rates or the mortgage qualification stress test. Some 40 per cent of first-time buyers were not aware of the new mortgage qualification rules.

Only one in five first-time buyers said that the mortgage stress test had impacted their home purchase. Of those that were affected, not all chose to spend less on their new home, with others using savings or family financial help to top up their down payments. This finding seems to challenge market reports that the stress test and its reduction of buyer purchasing power is in large part to blame for the current market downturn.

Indeed, overall confidence in the real estate sector remained high. Responding to the survey in April 2018, 74 per cent of first-time buyers and 89 per cent of repeat buyers believe that homeownership is a good long term financial investment. Nearly two thirds, 62 per cent, of first-time buyers and 70 per cent of repeat buyers believe the value of their house will increase in the 12 months from April 2018.

RECENT POSTS

Why a Mortgage Pre-Approval Protects Both Your Head and Your Heart

By James De Vuyst • July 23, 2026
Why a Mortgage Pre-Approval Protects Both Your Head and Your Heart There’s no denying it—buying a home is an emotional journey. In a competitive market, it can feel like you need to stretch beyond your comfort zone or bid above asking just to have a chance. That pressure can make it hard to separate what you want from what you can realistically afford. One of the biggest pitfalls buyers face is falling in love with a home that’s outside their price range. Once that happens, every other property seems like a compromise—even the ones that might have been a perfect fit otherwise. The best way to avoid this heartache? Get pre-approved before you start shopping. What a Pre-Approval Does for You A mortgage pre-approval gives you more than just a number—it provides clarity, confidence, and protection: Know your buying power : Shop within your true price range and avoid disappointment. Spot potential roadblocks : Uncover issues like credit bureau errors before you make an offer. Get organized : Learn exactly what documentation you’ll need so there are no surprises. Lock in a rate : Many lenders hold your rate for 30–120 days, giving you peace of mind if rates rise. Save yourself heartache : Protect yourself from falling for a home you can’t afford. Head vs. Heart Buying a home is about balance. Your head tells you what’s financially sound, your heart tells you what feels right—and both matter. A pre-approval helps bring those two sides together, so you can make confident choices without emotional stress clouding your judgment. The Bottom Line Looking at properties for fun is one thing—but if you’re serious about buying, a pre-approval is the smartest first step you can take. It sets realistic expectations, saves time, and protects your emotions along the way. If you’d like to explore your options and get pre-approved, I’d be happy to walk through the process with you. Let’s make sure you’re ready to shop with confidence.

Bank of Canada Holds Rate at 2.25% — July 15, 2026

By James De Vuyst • July 15, 2026
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The tone of today's announcement is notably more optimistic than previous months. Here's what's changed and what it means for you.

Breaking Down the Real Costs of Homeownership

By James De Vuyst • July 9, 2026
Don’t Forget About Closing Costs When planning to buy a home, most people focus on saving for the down payment. But the truth is, that’s only part of the equation. To actually finalize the purchase, you’ll also need to budget for closing costs —the out-of-pocket expenses that come up before you get the keys. Closing costs can add up quickly, which is why they should be part of your pre-approval conversation right from the start. Lenders will even require proof that you’ve got enough funds set aside. For example, if you’re getting an insured (high-ratio) mortgage, you’ll need at least 1.5% of the purchase price available in addition to your down payment. That means a 10% down payment actually requires 11.5% of the purchase price in cash to make everything work. Let’s break down some of the most common expenses you should prepare for: 1. Home Inspection & Appraisal Inspection : Paid by you, this gives peace of mind that the property is in good shape and doesn’t have hidden problems. Appraisal : Required by the lender to confirm value. Sometimes this is covered by mortgage insurance, sometimes by you. 2. Legal Fees A lawyer or notary is required to handle the title transfer and make sure the mortgage is properly registered. Legal fees are often one of the larger closing costs—unless you’re also responsible for property transfer tax. 3. Taxes Many provinces charge a property or land transfer tax based on the home’s purchase price. These fees can range from hundreds to thousands of dollars, so you’ll want to factor them in early. 4. Insurance Property insurance is mandatory—lenders won’t release funds without proof that the home is insured on closing day. Optional coverage like mortgage life, disability, or critical illness insurance may also be worth considering depending on your financial plan. 5. Moving Costs Whether you’re renting a truck, hiring movers, or bribing friends with pizza and gas money, moving comes with expenses. Cross-country moves especially can be surprisingly pricey. 6. Utilities & Deposits Setting up new services (electricity, water, internet) can involve connection fees or deposits, particularly if you don’t already have a payment history with the utility provider. Plan Ahead, Stress Less This list covers the big-ticket items, but every purchase is unique. That’s why it pays to have an accurate estimate of your personal closing costs before you make an offer. If you’d like help planning ahead—or want a breakdown tailored to your situation—let’s connect. I’d be happy to walk you through the numbers and make sure you’re fully prepared.