First Time Home Buyer Guide — London Ontario 2025

Step 1 — Know What You Can Afford

Before you fall in love with any home, you need a realistic picture of your budget. A general rule of thumb is that your home should cost no more than 4–5x your gross annual household income. In London ON, where average home prices sit around $615,000–$640,000, a household income of $120,000–$150,000 puts a typical home within reach.

Don't forget to factor in monthly carrying costs beyond your mortgage payment — property taxes in London average around $4,000–$6,000/year depending on assessed value, plus home insurance, utilities, and maintenance reserves.

Step 2 — Save Your Down Payment

In Canada, down payment requirements depend on the purchase price of the home:

• Homes under $500,000 — minimum 5% down
• Homes $500,000–$999,999 — 5% on first $500K, 10% on the remainder
• Homes $1,000,000+ — minimum 20% down required

For a $620,000 home in London ON, the minimum down payment would be $37,000 ($25,000 on the first $500K + $12,000 on the remaining $120K). However, putting down 20% ($124,000) eliminates the need for CMHC mortgage insurance and reduces your monthly payments significantly.

First-time buyers in Canada can also access the First Home Savings Account (FHSA) — a registered account that lets you contribute up to $8,000/year (lifetime max $40,000) with tax deductions on contributions and tax-free withdrawals for a qualifying home purchase.

Step 3 — Get Pre-Approved for a Mortgage

A mortgage pre-approval is not the same as a pre-qualification. A pre-approval involves a full credit check and income verification, and gives you a firm commitment from a lender up to a specific amount. This is essential in London's market — sellers and agents take pre-approved buyers far more seriously, and in competitive offer situations it can be the difference between winning and losing.

• Contact your bank or an independent mortgage broker
• Gather T4s, pay stubs, and 2 years of NOAs
• Pre-approvals are typically valid for 90–120 days
• Rate holds lock in today's rate while you search

Step 4 — Find a Local London ON Realtor

As a buyer, working with a realtor costs you absolutely nothing — the seller pays the buyer's agent commission. What you get in return is access to MLS listings the moment they hit the market, local expertise, negotiation support, and someone protecting your interests through the entire process.

A good London ON agent will know which neighbourhoods are appreciating, which streets to avoid, what fair market value looks like for a given home, and how to structure an offer that wins without overpaying. This knowledge is genuinely difficult to replicate on your own.

Step 5 — Start Your Search

With your pre-approval in hand and an agent by your side, you're ready to start seriously looking. In London ON, good homes in popular neighbourhoods like Old North, Byron, and Masonville can move quickly — sometimes in days. Be prepared to act.

• Set up MLS alerts for your target neighbourhoods and price range
• Visit homes in person — photos rarely capture the full picture
• Keep notes on every property — they blur together quickly
• Don't let perfect be the enemy of good — first homes are rarely forever homes

Step 6 — Make an Offer

When you find the right home, your agent will help you prepare an Agreement of Purchase and Sale. Key elements to understand:

• Offer price — based on comparable sales, not list price
• Deposit — typically 1–5% of purchase price, due within 24 hours of acceptance
• Conditions — financing condition, home inspection condition (both important)
• Closing date — typically 30–90 days from offer acceptance

In London's current market, conditional offers are more commonly accepted than during the peak 2021–2022 frenzy. Always include a home inspection condition — particularly important for London's older housing stock from the 1950s–1980s.

Step 7 — Home Inspection

A qualified home inspector will spend 2–3 hours examining the property from foundation to roof. Cost is typically $400–$600 in London ON and is absolutely worth every penny. Common issues found in older London homes include aging electrical panels (knob-and-tube or 60-amp panels), clay or cast iron plumbing, foundation cracks, and older roofs nearing end of life.

The inspection report gives you negotiating power — you can request repairs, ask for a price reduction, or in serious cases, walk away entirely within your condition period.

Step 8 — Closing Costs

Budget for closing costs on top of your down payment. In Ontario, expect to pay:

• Ontario Land Transfer Tax — on a $620K home, approximately $8,950
• First-time buyer LTT rebate — up to $4,000 back (Ontario program)
• Legal fees — $1,500–$2,500 for a real estate lawyer
• Title insurance — $200–$400
• Home inspection — $400–$600
• Moving costs — budget $1,000–$3,000 depending on distance

Total closing costs for a first-time buyer on a $620K home in London ON typically run $8,000–$14,000 after the LTT rebate.

Step 9 — Get the Keys

On closing day, your lawyer will transfer funds, register the title in your name, and hand over the keys. Before closing, do a final walkthrough of the property to confirm it's in the agreed-upon condition. Then it's yours.