The most expensive home buying mistakes happen before you ever make an offer: shopping without a pre-approval, forgetting closing costs and skipping due diligence on the home. Others happen between offer and closing, like taking on new debt. Here are the 10 mistakes we see most often in Ontario, and exactly how to avoid each one.
Key takeaways
- Get pre-approved before you start touring homes.
- Budget for closing costs, not just the down payment.
- Protect yourself with inspection and financing conditions when you can.
- Don’t change jobs or take on new debt before closing.
- Check permits, especially for basement apartments.
Money mistakes
1. Shopping before you’re pre-approved
Touring homes without a pre-approval is like grocery shopping without knowing your bank balance. A mortgage agent or lender will check your income, debts and credit, then tell you what you can borrow. You’ll shop with confidence and move faster when you find the right home.
2. Forgetting the stress test
Lenders qualify you at the higher of your contract rate plus 2% or 5.25%. That means you may qualify for less than you expect. Your pre-approval will reflect this, which is another reason to get one early.
3. Ignoring closing costs
Many buyers save hard for the down payment and forget the rest. You’ll also pay land transfer tax, legal fees, title insurance, an inspection and adjustments. A common rule of thumb is to budget 1.5% to 4% of the price on top of your down payment. In the City of Toronto, the extra municipal land transfer tax pushes costs higher.
4. Choosing a mortgage on rate alone
The lowest rate isn’t always the best deal. Look at prepayment privileges, penalties for breaking the mortgage and whether it’s portable if you move. Read our guide on how to choose a mortgage agent who can compare options for you.
Due diligence mistakes
5. Waiving the home inspection
An inspection can reveal a failing roof, foundation cracks or old wiring before you’re locked in. With the GTA market moving toward balance in 2026, many sellers will accept an inspection condition. If not, consider a pre-offer inspection.
6. Not checking permits
Basement apartments, additions and decks should have permits. An unpermitted unit may not count as legal rental income and could need costly upgrades for fire separation and egress windows. Ask for permits before you firm up.
7. Falling for the photos
Listing photos use wide lenses and perfect lighting. Visit at different times of day. Check traffic noise, parking and the street at night. Walk the neighbourhood on a weekend.
Bungalow tip: Older bungalows often have original electrical panels, galvanized pipes or a past oil tank. Ask about each one early, because they can affect insurance as well as repair costs.
Process mistakes
8. Skipping the lawyer until the last minute
Hire your real estate lawyer before you make offers. They can review conditions, flag concerns in the agreement and have time to search title before closing.
9. Making big financial changes before closing
Your lender can re-check your finances right up to closing. Avoid these until you have the keys:
- Financing a new car or furniture
- Opening new credit cards
- Changing jobs or going self-employed
- Moving large sums of money without a paper trail
- Missing any bill payments
10. Buying for today only
Think about the next five to ten years. Will you need another bedroom, room for a parent or a main-floor layout for aging in place? A home that fits your future saves you a costly move later.
Mistakes at a glance
| Mistake | What it can cost you | How to avoid it |
|---|---|---|
| No pre-approval | Lost homes and wasted time | Get pre-approved first |
| Ignoring closing costs | A cash crunch before closing | Budget 1.5% to 4% extra |
| Waiving inspection | Surprise repairs | Include a condition or inspect before offering |
| Unpermitted suite | Lost rental income or upgrade costs | Ask for permits and registration |
| New debt before closing | A failed mortgage approval | Freeze big purchases until you have keys |
How first-time buyers can avoid costly gaps
If it’s your first purchase, make sure you’re using every program you qualify for. As of September 2026, these include the FHSA, the RRSP Home Buyers’ Plan, the Ontario land transfer tax refund of up to $4,000 and, inside the City of Toronto, the municipal rebate of up to $4,475. Missing one can mean leaving real money behind.
Our home buyer calculators help you see down payment, mortgage and land transfer costs together.
Frequently asked questions
What is the biggest mistake first-time home buyers make?
Underestimating total costs is one of the most common. Closing costs, moving, furnishings and repairs add up quickly on top of the down payment.
Can a mortgage approval be cancelled before closing?
Yes. If your income, debts or credit change, the lender can review or withdraw the approval, so keep your finances steady until closing.
Should I buy a home that needs work?
It can be a good way to get into a better area, as long as you get an inspection and real contractor quotes before you commit.
How much savings should I keep after closing?
Keep an emergency cushion for repairs and surprises, especially with an older home. Draining every dollar for the down payment leaves you exposed if the furnace or roof fails in year one.
The bottom line
Most home buying mistakes come from rushing. Get pre-approved, budget for the full cost, protect yourself with conditions and keep your finances steady until closing.
For a full roadmap, read our step-by-step buyer’s guide, and check out the questions to ask when viewing a house before your next showing.
Bungalows for sale in Toronto right now
Live listings from the area this article covers.
$1,500,00097 Estelle Avenue, Toronto3+4 bed · 7 bath · Willowdale EastCourtesy of RE/MAX REALTRON REALTY INC.
$699,0007 Twenty Second Street, Toronto3+3 bed · 3 bath · Long BranchCourtesy of RE/MAX PREMIER INC.
$945,000257 John Tabor Trail E, Toronto3+2 bed · 2 bath · MalvernCourtesy of RE/MAX ATRIUM HOME REALTY
$1,145,000109 Gulliver Road, Toronto4 bed · 3 bath · Brookhaven-AmesburyCourtesy of RE/MAX REALTY SPECIALISTS INC.
$1,398,80074 Navaho Drive, Toronto3+4 bed · 3 bath · Pleasant ViewCourtesy of HOMELIFE LANDMARK REALTY INC.
$2,990,00061 Highland Crescent, Toronto2+1 bed · 2 bath · Bridle Path-Sunnybrook-York MillsCourtesy of RE/MAX REALTRON BARRY COHEN HOMES INC.
