What First-Time Buyers Should Plan Before January 2026

For first-time homebuyers, the final weeks of 2025 are a powerful planning window. With mortgage rates stabilizing, stress-test pressure easing, and buyer competition expected to rise in spring 2026, what you do before January can make a major difference in affordability, approval, and negotiating power.

Here’s a clear, step-by-step guide to what first-time buyers should plan before January 2026.

1. Get Pre-Approved (and Lock a Rate)

A mortgage pre-approval:

• Confirms your true buying power

• Identifies potential credit or income issues

• Locks in a rate for up to 120 days

• Strengthens your negotiating position

Pre-approving in December protects you from early-2026 market shifts.

2. Understand the Stress Test and Qualification Rules

Before applying, know how you’ll be assessed:

• You must qualify at contract rate + 2% or the minimum qualifying rate

• Debt ratios (GDS/TDS) still matter

• Lower rates in late 2025 make qualifying easier than in prior years

Understanding this avoids surprises.

3. Finalize Your Down Payment Strategy

Before January, map out all sources:

• Savings

• FHSA (Tax-Free First Home Savings Account)

• RRSP Home Buyers’ Plan

• Gifts from family

Having funds documented and ready speeds up approval.

4. Improve Your Credit Score Before Applying

Your credit score directly affects:

• Mortgage rate

• Lender options

• Approval likelihood

Before year-end:

• Keep credit utilization under 30%

• Avoid new credit

• Pay balances down

• Fix any errors on your credit report

Even small improvements help.

5. Budget for Closing Costs

First-time buyers often overlook closing costs.

Plan for:

• Land transfer tax (with rebates where available)

• Legal fees

• Appraisal

• Home inspection

• Adjustments and moving costs

Budgeting now prevents last-minute stress.

6. Learn About First-Time Buyer Incentives

Before January 2026, review:

• Federal incentives

• Provincial land transfer tax rebates

• Municipal programs (where applicable)

• GST/HST rebates on new builds

Knowing what you qualify for can save thousands.

7. Decide What Mortgage Type Fits You Best

Understand the pros and cons of:

• Fixed vs. variable rates

• Short-term vs. 5-year terms

• Insured vs. uninsured mortgages

Your choice impacts both affordability and risk.

8. Research Target Neighbourhoods

Winter is a great time to:

• Visit neighbourhoods in real conditions

• Evaluate commute times

• Check noise levels and safety

• Assess amenities and transit

This helps you narrow choices before spring competition returns.

9. Avoid Major Financial Changes

In the months leading up to your purchase:

• Don’t change jobs

• Avoid large purchases

• Don’t open new credit

• Keep bank balances stable

Lenders value consistency.

10. Build Your Professional Team Early

Before January, line up:

• A mortgage broker

• A real estate agent

• A real estate lawyer

• A home inspector

Having your team ready speeds up the buying process.

Final Thoughts

Planning before January 2026 gives first-time buyers a huge advantage. By securing financing, improving credit, organizing funds, and understanding incentives, you’ll enter the new year confident, prepared, and ready to act — before competition heats up.

If you’d like, I can turn this into a RateShop first-time buyer checklist, email guide, or Instagram carousel.