About this video Tom covers five mistakes he sees first time buyers in Toronto making, plus a bonus tip on why it may be worth rerunning the numbers in 2026. It is a practical guide for anyone planning to buy their first home, or for parents helping a son or daughter get into the market. Key points Open a First Home Savings Account (FHSA) right away. Tom explains you can...
About this video
Tom covers five mistakes he sees first time buyers in Toronto making, plus a bonus tip on why it may be worth rerunning the numbers in 2026. It is a practical guide for anyone planning to buy their first home, or for parents helping a son or daughter get into the market.
Key points
- Open a First Home Savings Account (FHSA) right away. Tom explains you can contribute $8,000 a year up to $40,000, it reduces your taxable income, grows tax free, and does not need to be paid back when used for your first home. Opening it early gives you contribution room even if you cannot fund it yet.
- Do not assume new construction is safer than resale. Even with the HST changes, Tom believes resale is still the better option for about 80% of buyers, and having your own agent helps you negotiate with developers.
- Treat your mortgage preapproval as a ceiling, not a target. You do not have to borrow the maximum the bank offers.
- Think about resale value using Tom’s STAMP formula: size, tenancy, asking price, maintenance fees and parking, after choosing the right location.
- Budget for closing costs beyond your down payment, such as land transfer tax (which can still be thousands of dollars after the first time buyer rebate) and lawyer fees of about $1,500 to $2,000. These cannot be added to the mortgage.
Questions answered in this video
Why does Tom call the FHSA the best account for first time buyers?
Tom says it combines the best of an RRSP and a TFSA: contributions come off your taxes, the money grows tax free, and you do not have to pay it back when you use it for your first home. You can open one in Ontario at 18.
Should I spend my full mortgage preapproval amount?
No. Tom explains the preapproval is the most the bank is willing to lend, not a target. Sometimes you may need to go near the top to get what you want, but there are often good options below your maximum.
Why should first time buyers rerun their numbers in 2026?
In this May 2026 video, Tom points to three changes: lower home prices, interest rates leveling out in the 3.5 to 4.5% range, and a lower stress test as a result. Together these may allow people to qualify who previously could not.
Related: First time home buyer guide | Buying a home in Toronto | Toronto condo specialist
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[00:00] – Introduction: Why the advice first-time buyers receive is often the real problem.
[01:08] – Mistake #1: Not Opening a First Home Savings Account (FHSA). A breakdown of why this tax-free account is a must-have for getting into the market.
[02:44] – Mistake #2: Assuming New Construction is Always Safer Than Resale. Why resale properties are often a better option for the majority of buyers.
[03:49] – Mistake #3: Treating Your Pre-Approval as a Target. Why you should view what the bank is willing to lend you as a ceiling, not the mandatory spending amount.
[04:46] – Mistake #4: Ignoring Future Resale Value. An introduction to the “STAMP” formula (Size, Tenancy, Asking Price, Maintenance, Parking) to ensure long-term value.
[06:54] – Mistake #5: Forgetting About Additional Closing Costs. A reminder to budget for land transfer taxes and lawyer fees outside of the down payment.
[08:20] – Bonus Tip: Why You Should Rerun the Numbers. How lower prices, leveled interest rates, and adjusted stress tests might mean you qualify now even if you didn’t before.
The opinions expressed herein are solely that of Tom Storey, not Royal LePage or the TRREB and should not be misconstrued as advice or the basis of an agency relationship whatsoever. Please consult your professional advisor prior to taking action on any decisions relating to the matters discussed in these videos. This communication is not intended to cause or induce breach of an existing agency agreement. This is not financial advice.
