Ottawa Mortgage Blog

First-Time Homebuyer Mistakes to Avoid

April 2, 2026 | Posted by: Jamie Small - Ottawa Mortgage Broker

Buying your first home is exciting. It is also where small decisions can quietly turn into expensive ones.

In today’s market, with stricter lending guidelines and shifting rates, preparation matters more than ever. The difference between a smooth purchase and a stressful one usually comes down to what happens before you buy.

Here are the most common mistakes I’m seeing, and how to avoid them.

1. Overlooking Your Credit

Your credit is one of the biggest drivers of your approval and your rate, yet it is often underestimated.
It is not just about having “good credit.” It is about how you manage it leading up to your application.

Where people go wrong:

• Missing a payment, even once

• Carrying high balances (over 30% of your available credit)

• Opening multiple new accounts at once, or applying for too much credit

• Closing older accounts and shortening credit history

What to do instead:
• Pay everything on time, lean into automatic payments if need be
• Keep balances low and consistent (ideally under 30%)
• Avoid new credit before applying
• Keep long-standing accounts open
• Check your report for errors

You do not need perfect credit. But stronger credit gives you more options, and often better ones. In Canada, a credit score of 680+ generally gives you access to better mortgage options, though approvals can still happen below that with the right structure.

2. Misunderstanding the Down Payment

The down payment is more than just a number. It is a strategy.

Minimum requirements in Canada:
• 5% for homes up to $500,000
• 10% on the portion up between $500,000-$1,500,000
• 20%+ for homes above $1.5M (required)

Saving is one part. Structuring it properly is the other. Luckily, there are tools to help you save more efficiently:

FHSA: First Home Savings Account

Allows you to contribute up to $8,000 per year, up to $40,000 lifetime, for a purchase of a first home. Contributions are tax-deductible (providing a tax refund), and growth in the account is tax-free.

HBP: Home Buyers Plan

Allows first-time homebuyers to withdraw up to $60,000 per person ($120,000 per couple) from an RRSP tax-free, to be used towards a down payment. Funds must be repaid over a 15-year period, starting on the second year after you made the first withdrawal.

Where buyers get tripped up:
Lenders require a full 90-day history of your funds.
Large or unexplained deposits can create issues, even if the money is yours.

What to do instead:
• Keep funds in one place for at least 90 days
• Avoid moving money around last minute
• Document all deposits clearly
• Talk through any large transactions with your Mortgage Broker in advance

3. Waiting Too Long to Get Pre-Approved

Pre-approval is not just a formality anymore. It is a key part of your buying strategy.

What it actually does:
• Locks in your rate
. If rates rise, you are protected.
If they drop, you can still access better options.
• Defines your real budget
, not just what you qualify for, but what your payments actually look like.
• Strengthens your offer
. Sellers want certainty. A solid pre-approval shows you are serious and ready.
• Catches problems early
. Credit, income, documentation, or down payment issues can be fixed ahead of time.
• Speeds everything up
. When you find the right home, you are already halfway there.

4. Making Changes Before Closing

This is where many deals quietly fall apart.

Even after approval, your mortgage is not final until closing. Changes during this window can create problems.

Common mistakes:
• Changing jobs
• Taking on new debt
• Financing furniture or a vehicle
• Increasing credit balances

What to do instead:
• Keep everything stable
• Avoid new credit
• Hold off on major purchases
• Check in before making financial changes

Financial Planning Support

Buying your first home is not just about getting approved. It is about building something that works once real life kicks in.

If you are planning a move this year, start early. A simple conversation can help you avoid the mistakes that cost time, money, and unnecessary stress.

Back to Main Blog Page