The buyer's guide for 2026: budget and financing

Buying a home remains one of the biggest financial commitments of a lifetime. And in 2026, the process has become more complex: fluctuating interest rates, revised mortgage rules, and a tighter market in certain areas of the Estrie region. The good news is that a well-prepared real estate purchase plan always follows the same step-by-step process, from the initial budget calculation to signing the deed of sale at the notary’s office.

This guide walks you through each of these steps. You’ll find practical tips for building your budget, understanding your financing, submitting a solid offer to purchase, and—most importantly—avoiding costly mistakes. Whether you’re looking to buy your first home or make an investment, the goal is the same: to move forward with confidence, without any unpleasant surprises.

The major steps in a home-buying project

Before getting into the details, here are the major steps in buying a home in Quebec: 

1. Define Your Plan and Needs
2. Set your budget and down payment
3. Get mortgage pre-approval
4. Find the right property and tour it
5. Submit an offer to purchase
6. For an existing property: Conduct a pre-purchase inspection
7. Finalize the mortgage and insurance
8. Sign the deed of sale at the notary’s office and take possession

Each step in the real estate process builds on the one before it. Skipping a step—such as shopping for a home before knowing your borrowing capacity—can lead to disappointment. So let’s go through the steps in order.

Clarify your plans: needs, type of property, neighborhood

It all starts with a simple question: What are you really looking for? A single-family home, a townhouse, a condo, or a row house? How many bedrooms, which area, and how far from work and schools? Putting these criteria down on paper will save you precious time and prevent you from falling in love with a property that doesn’t fit your reality.

Also consider the area. Prices vary greatly from one municipality to another, and the Estrie region often offers better value for money than major urban centers. Depending on the type of community that appeals to you, you might want to compare homes for sale in Sherbrooke or Coaticook. And if you’re exploring developing neighborhoods, take a look at our residential projects—they give a good idea of which areas are on the rise.

Primary residence or rental investment?

The nature of your project changes the game.

• For a primary residence, you’ll benefit from the best financing terms and several government programs.
• For a rental investment, down payment requirements may differ from those for a primary residence. For a rental property not occupied by the owner, a 10% down payment is required. The lender will assess the property’s profitability as well as your income.

If this is your first home purchase, know that you have access to valuable programs. We’ve also detailed the grants and assistance available for buying a first home in the Estrie region in a dedicated article.

Setting Your Purchase Budget for Your Primary Residence 

Your budget isn’t just the listed price. Before you start shopping, you need to know two figures: how much you can borrow, and how much cash you’ll need on closing day.

Down payment: How much should you set aside?

The down payment is the amount you pay out of pocket, which is deducted from the purchase price. In Canada, the minimums are as follows:

• 5% of the price for a property of $500,000 or less
• 5% on the first $500,000, then 10% on the portion between $500,000 and $1,000,000
• 20% for a property valued at $1,000,000 or more

If your down payment is less than 20%, you’ll need to purchase mortgage insurance (the CMHC premium), which protects the lender in the event of default. This premium is added to your loan.

Additional Costs Beyond the Purchase Price

This is where many buyers underestimate the total cost. In addition to the down payment, you should generally budget between 1.5% and 3% of the purchase price to cover:

• Notary fees: approximately $1,200 to $2,000
• Property transfer tax: based on the property’s municipal assessment
• Pre-purchase inspection (for an existing property, see below): approximately $500 to $850
• Homeowners insurance: required as soon as you take possession
• Moving costs, utility hookups, and a small emergency fund

One specific situation deserves your attention: the purchase of a new home. Unlike a previously occupied home, a new property is subject to taxes: the GST (federal tax) and the QST (provincial tax) are added to the price. The good news is that a government program allows you to claim a refund for a portion of these taxes, under certain conditions. 

We explain everything in our guide to tax refunds for new homes, including the thresholds and calculations. 

Note: With a developer like Les Entreprises Lachance, the listed prices already include the GST and QST, so there are no surprises when you sign the contract.

Financing: Mortgages and Borrowing Capacity

Financing is at the heart of your project. Few people pay for a property in cash; most take out a mortgage—that is, a loan secured by the property itself.

Assessing Your Borrowing Capacity

Your borrowing capacity depends on your income, your debts, and your credit score. Lenders use two ratios: the gross debt service ratio (GDS), which should not exceed about 39% of your income, and the total debt service ratio (TDS), capped at around 44%. In short: your housing costs and debts shouldn’t take up too large a portion of your income.

Here’s a simple tip: don’t automatically aim for the maximum amount you’re approved for. The lender’s limit isn’t your comfort zone. Base your budget on what you actually want to pay each month.

Mortgage Pre-Approval and the Application Process

Pre-approval is the step that changes everything. It confirms the amount a lender is committed to lending you and locks in an interest rate for 60 to 130 days. With pre-approval in hand, you’ll be seen as a serious buyer and can submit an offer quickly.

To put together your application, gather the following:

• Proof of identity
• Proof of income (pay stubs, tax assessment notices)
• A breakdown of your assets and liabilities
• Proof that you have the down payment

You can apply directly with a financial institution or work with a mortgage broker who will compare offers. To help you get started, our financing page outlines the options available to homebuyers.

Mortgage Insurance and Borrower Insurance

There are two types of insurance to consider, which should not be confused. Mortgage insurance (CMHC) is mandatory if your down payment is less than 20% and protects the lender. Borrower insurance (life, disability) is optional and protects you and your loved ones in the event of a major setback. Finally, home insurance is required by all lenders as soon as you take possession of the property.

Finding the Right Property

With your pre-approval in hand, it’s time to start your search. This is the most exciting stage, but it requires a systematic approach to stay objective.

Searching and Viewings

Schedule as many viewings as possible and compare properties. When you’re on-site, look beyond the decor: inspect the structure, roof, windows, foundation, and check for signs of water damage. Ask questions about the age of the components and any renovations that have been done. In Quebec, the seller’s disclosure statement will provide information on the property’s history and known condition.

Also consider energy efficiency. A well-insulated home means lower heating bills year after year. Newer homes, particularly those with Novoclimat certification, have significantly better energy performance than older buildings.

New home or existing home?

This is a truly fundamental question. An existing home has character and is located in an established neighborhood, but it may require hidden repairs. A turnkey new home, on the other hand, comes with no renovations to plan for, along with warranties and state-of-the-art energy efficiency.

If the idea of a new home appeals to you, two options are available. You can choose from our new homes for sale in the Estrie region, all ready to move into. And if you don’t have a lot yet, we also offer land for sale in several areas.

For an existing property, pay particular attention to the condition of the structure, the roof, the windows, and the foundation. The seller’s disclosure statement and the pre-purchase inspection also provide valuable insight into the property’s condition and any potential repairs that may be needed.

For a new home, the criteria are different. Instead, focus on the choice of model and options, the location of the housing development, the applicable warranties, energy efficiency, and the inclusions and exclusions in the contract. You should also review the developer’s specific terms and conditions and the details regarding notary fees before committing.

The Promise to Purchase (Offer to Purchase)

Have you found that rare gem? Now it’s time for the promise to purchase, sometimes called an offer to purchase. This is a formal, binding proposal: if the seller accepts it and the conditions are met, the sale will be finalized.

What a promise to purchase contains

The document specifies, among other things, the names of the parties, the address, the offered price, the inclusions (appliances, light fixtures, etc.), the closing date, and the timeframe given to the seller to accept the offer. If you are working with a real estate broker, they will use the form approved by the OACIQ.

Conditions: Financing and Inspection

An offer can be unconditional or conditional. Two conditions almost always apply and protect you:

• The financing condition: your purchase is confirmed only if your mortgage is officially approved.
• The inspection condition: You can withdraw from the deal or renegotiate if the inspection reveals major defects.

A well-drafted offer to purchase includes these conditions. It’s tempting to waive the inspection condition to make your offer more attractive in a competitive market, but it’s a risky gamble.

Acceptance Deadline, Down Payment, and Negotiation

The seller may accept, reject, or respond with a counteroffer. This is followed by a negotiation phase regarding the price and terms. A down payment (deposit) may accompany your offer to demonstrate your seriousness; it will be applied toward the purchase price upon signing. Be mindful of the acceptance deadline: an offer is valid for a limited time, after which it expires.

The Pre-Purchase Inspection

This step applies primarily to the purchase of an existing property. In the case of a new home, a pre-purchase inspection is generally not necessary, since the construction is covered by legal warranties and buyers rarely require one.

The pre-purchase inspection is a “health check” for the property. A qualified building inspector examines the structure, roof, plumbing, electrical system, and building envelope, then provides you with a report. Expect to pay about $500 to $850 for a single-family home, and be sure to accompany the inspector—this is the best time to ask your questions.

This report is a decision-making tool. If it reveals major repairs, you can adjust your offer, demand that the issues be fixed, or walk away—provided your offer is conditional on the inspection. Also remember that the seller’s disclosure statement is never a substitute for a proper inspection.

Signing the Deed of Sale at the Notary’s Office

In Quebec, a visit to the notary is mandatory. The notary formalizes the transaction. They verify the property titles, draft the deed of sale and the mortgage deed, calculate any adjustments (taxes, services), and ensure that each party understands what they are signing.

To prepare for the signing of the deed of sale, have your identification documents, proof of insurance, and property documents (certificate of location, inspection report, offer to purchase) on hand. Notary fees, which are generally the buyer’s responsibility, cover the notary’s fees and transfer costs. Note that when buying a new home, some developers, such as Les Entreprises Lachance, may cover part of the notary fees under certain conditions—unlike when buying a pre-owned property, where these fees are always the buyer’s responsibility. Once the deed is signed and the funds are released, you’ll walk away with the keys. Congratulations: you’re a homeowner.

Pitfalls to Avoid When Buying Real Estate

It’s often the unexpected that derails a project. Here are the most common mistakes—and how to avoid them:

• Shopping for a home before getting pre-approved. You risk setting your sights on properties that are out of your budget or missing out on an opportunity because you don’t have confirmed financing.
• Forgetting about closing costs. Notary fees, transfer tax, inspection, home insurance—these costs add up quickly. Budget for them from the start.
• Confusing the pre-approved limit with your actual budget. The maximum amount approved is not a target. Keep a buffer for unforeseen expenses and rate hikes.
• Waiving conditions to win a bidding war. An offer without inspection or financing contingencies can cost you dearly if a problem arises.
• Changing your financial situation between pre-approval and closing. Changing jobs, financing a car, or maxing out your line of credit can cause your loan to be canceled. Keep your financial situation stable until the end.
• Underestimating timelines. There’s often a gap of several weeks between when your offer is accepted and when you take possession. Plan ahead for the end of your lease, the move, and the processing time for your financing.

One last tip that’s worth its weight in gold: surround yourself with the right people. A real estate agent, notary, mortgage advisor, and—for new construction—an experienced developer.