December 19, 2022 | Buyers

The Ultimate Guide for First-Time Buyers in Guelph

If you’re thinking about buying your first home, there are many reasons that Guelph should be at the top of your list. In 2020, MoneySense Magazine named the city the best place to buy a home in Canada. For young professionals, a wealth of high-paying career opportunities, world-class education and relatively low housing prices are just a few advantages Guelph offers. Families can enjoy a scenic and safe community with a host of fun activities to share. 

Let’s take a look at a few of the benefits and challenges of owning a home. As of late 2022, it’s still possible to find a townhouse for less than $600,000. Entry-level condos can be found for even less. As the cost of rent keeps increasing, buying a home so you can begin building equity just makes sense. 

Introducing the Property Ladder

The “property ladder” is a term real estate professionals often refer to. When you rent, you’re not on the ladder. If you pay $2,000 per month, that money is gone forever with no way of recouping it. Buying your first home puts you on the first rung of the ladder and sets you up for greater financial abundance and security. Some financial experts go so far as to call mortgages a “forced savings account.” 

That’s because a portion of every payment comes back to you in the form of equity. Every month, you own a greater stake in your property. Even better, your home will increase in value as time goes by. 

Just think: The average sale price of housing in Guelph in 2018 was $513,450. Over the years, prices can fluctuate, but the overall trend is always up. Fast forward to November 2022, and the average cost of a house rose to $834,564. Anyone who bought a house in 2018 would have seen their equity grow by $321,114 – in just four years!

Equity growth is one of the reasons real estate is widely considered one of the safest and most profitable investments anyone can make. And it’s not too late to get onto the property ladder. Prices are down from their February peak, but values will inevitably rise again.

Are you interested in getting on the first rung of the property ladder this year? Here are even more resources that will help:

Overcoming the First-Time Buyer Jitters

Buying a home for the first time can be intimidating. For one, it’s a massive financial commitment. Real estate contracts are also complex and legally binding. Plus, there’s the added pressure of committing to living in one place for a longer time. As a tenant, you don’t have to think about any of this.

As a first-time buyer, it’s normal to feel a bit nervous about your decision, even when you know it’s the right move. Here are some tips to help you overcome these home-buying jitters so you can look forward to your exciting new adventure:

  • Think of all the benefits of owning your own home. Not just the financial advantages. Imagine the fun times you will spend with your family and friends.
  • Take it one step at a time. Whenever you feel overwhelmed, it’s often because you’re taking on too much all at once. But you can break it down into smaller, more easily digestible steps. 
  • Make a list of the steps involved and check them off as you go. Your list might include selecting a real estate agent, getting pre-approved, visiting an open house, etc.

Above all, remember that you don’t have to rush into anything. You can visit an open house or schedule an appointment for a showing, but you don’t have to act until you’re ready.

If you really want to overcome those buying jitters, think of how investing in your first house can secure your financial future! For example:

Can You Afford to Buy a House?

For some people, a better question might be, can you afford not to buy a house? The cost of buying is down, but rent prices are skyrocketing. The recent shift in the market caused many potential buyers to hesitate. Fewer people buying means more are renting, which is driving up the cost of rental housing.

According to Zumper, the average price of a one-bedroom apartment in Guelph is now $2,096 per month, a 27% increase year over year. As prohibitive as those prices may be, the limited supply means they are not likely to decrease anytime soon.

If you can make it work, that money is much better invested in buying a property rather than renting. What does it take to afford a house in today’s economy?

Rising interest rates have many potential buyers worried because the cost of borrowing increases, so do your monthly mortgage payments. Higher interest can also impact the amount lenders are willing to approve, making it more difficult to pass the stress test. However, there is a silver lining in all of this that you should not ignore.

Interest rates are only one factor in housing affordability.

  • In April, the average price of a house was $1,151,474, as opposed to $834,564 in November. Even though the percentage is higher, it’s calculated based on a price that is $316,910 less.
  • Interest rates change. The rate may be down by the time your mortgage comes up for renewal, which will either help you pay off your loan faster or reduce the monthly amount.

Did you know that we have an entire course just for first time home buyers? You can get it for free today right here.

Consider Your Down Payment

The real advantage of buying your first home in the current market is the difference in the down payment. For a house over $1 million, you automatically need 20%. Unless you’re a particularly affluent first-time buyer, coming up with more than $200,000 can be insurmountable.

But everything changes once housing prices start to drop. For houses less than $1 million, the rule is 5% on the first $500,000 and 10% on the rest. Let’s see how this adds up.

  • 5% of $500,000 equals $25,000.
  • For example, let’s say your house costs $800,000, which leaves $300,000 remaining. 10% is $30,000.
  • Your total down payment becomes $55,000, a far more accessible amount than $200,000.

Everyone is in a different place financially, and you may still think that $55,000 is out of reach. Keep in mind that it isn’t necessary to spend $800,000 on your first home. Many townhouses and condos are even more affordable. In addition, there are several government programs designed to help first-time buyers that may make reaching the down payment more attainable than you realize. 

Multiple offer scenarios are far less frequent in the current market, but they can still happen. Find out how to handle them like a pro right here.

Government Programs to Assist First-Time Buyers

Both the federal and provincial governments have been under pressure for years to address the issue of housing affordability. And they are finally beginning to take action. The More Homes Built Faster Act seeks to increase the number of residential homes per lot, which will help add to the much-needed supply.

A new federal law taking effect in 2023 will ban foreign investors from buying homes in Canada. This will help free up the supply for Canadian residents to make buying homes more affordable for everyone.

That said, several government programs are already in place to help you own your first home sooner rather than later.

The First-Time Home Buyer’s Incentive

It may sound hard to believe, but the federal government will help you with your down payment on your first home. Under the First Time Home Buyer’s Incentive, you can get as much as 5% towards your purchase of a resale home. When buying a new build, you can qualify for up to 10%. Of course, this isn’t free money. It never is when the government is concerned. What’s the catch?

The incentive functions as an interest-free loan, but it also gives the government a stake in your property. You are required to repay the loan, plus 8% of any annual increase in value, after 25 years or when you sell the house. In the unlikely event your house drops in value, you will repay the loan minus 8% of the loss.

The program isn’t perfect. Still, a loan of 5%-10% of the purchase price can mean the difference between getting into your first home or continuing to rent. 

Home Buyer’s Plan

Do you have money invested in an RRSP or TFSA? If so, you can pull as much as $35,000 for your down payment with no tax penalty under the Home Buyer’s Plan. When buying with a partner, you can both take advantage of the program, giving you up to $70,000 towards your purchase. You have 15 years to repay those funds before any tax penalties kick in.

Land Transfer Tax Rebate

Of all programs intended to help first-time buyers, the Land Transfer Tax Rebate may make the most impact. It isn’t just the purchase price of the house to consider. You also have closing costs which can add anywhere from 3-5%. The good news is that you can add some of these fees to your mortgage. However, the land transfer taxes must be paid upfront. Luckily, first-time buyers in Ontario can qualify for an instant rebate of up to $4,000, making your purchase far more affordable.

First-Time Home Buyer Tax Credit

Buying a home gets you on the first rung of the property ladder and allows you to start growing your equity and net worth. It also entitles you to the First Time Home Buyer Tax Credit. In 2022, the Federal Budget passed to increase the credit to $10,000. This translates into a tax reduction of $1,500.

The Difference Between Your Down Payment and the Deposit

The terms down payment and deposit sound similar, but there is a difference. The down payment is the total amount you must have upfront before you qualify to make the purchase.

The deposit is the amount you place in a real estate trust fund within a day or two of a seller accepting your offer, usually 3-5% of the purchase price. It secures your home and shows that you intend to follow through on your purchase agreement.

After your transaction closes, the deposit gets added to the remainder of the down payment, and all funds are released to the seller.

Financing your first home is a whole other topic. You’ll find everything you need to know to get started in the articles below:

The Steps to a Successful Purchase

Now that you’re an educated and well-informed buyer, it’s time to review all the steps in your journey to becoming a proud homeowner. Having a roadmap to follow helps reduce the stress and anxiety that often go along with such a life-changing decision.

Choose a Real Estate Agent

Did you know it costs you nothing to work with a real estate agent as a buyer? The seller pays the commissions, which then get split between the listing and buying agents, meaning nothing comes out of your pocket. 

However, the benefits of working with a local professional are endless. 

  • They can help you find the right home even if it doesn’t appear in public listings. 
  • As a first-time buyer, you will have many questions! Your agent will be a non-stop source of information, encouragement, and guidance.
  • You’ll have an expert by your side during showings to help you know what to look for and what to avoid.
  • Your agent will help you negotiate the best price and terms of the sale.

Get a Pre-Approval

A pre-approval is a detailed estimate by your lender that shows how much financing you qualify for. You fill out a mortgage application, and the lender will run an extensive background check. Upon completion, you’ll have a certificate of pre-approval that allows you to set your budget and proves to the seller that you qualify for financing. If you ever come up against competition for a home you love, a pre-approval can be a powerful negotiating tool.

Determine Your Wants and Needs

Before viewing potential homes in person, it helps to have a clear picture of what you’re looking for. Once you’ve gone through the pre-approval process and analyzed your resources, you can make a list of features you want within your budget range. Here are a few thoughts to start with:

  • Do you want a condo, townhouse, or detached home with a backyard?
  • Is a driveway or garage important?
  • How many bedrooms and bathrooms do you prefer?
  • What kind of layout do you like?
  • Do you want a resale home or a newly constructed house?

Do you know what you’re looking for in your new home? Perhaps you will find the perfect match right here in our featured listings.

How Quickly Do You Want It?

Deciding what you want beforehand will help you narrow it down so you don’t feel overwhelmed with the choices. It will also give your real estate agent something to work with to start uncovering the most likely contenders for your new home!

You’re Almost There!

Once you find a home you love that fits your budget, your agent will help you craft a compelling offer with a high likelihood of acceptance. As soon as the seller agrees, you’ve just purchased your brand-new home. The last step is the closing process. 

A real estate lawyer will examine your purchase agreement and review the title to ensure a seamless transfer of ownership. Once everything checks out, you can pack your bags and the celebrations can begin!

We have been helping buyers in the Guelph and surrounding areas since 2006 and are excited to help you secure your first home! If you’re ready to take the next step or just want a friendly chat about your options, reach out to us today at or call our office at 519-826-7109.

GoWylde Newsletter