Honest Advice

Eight Situations Where You Should Not Buy

By Georges Matar · June 8, 2026 · 6 min read

Qualifying and being ready are two different things. A lender measures your repayment capacity at one precise moment. It does not measure whether the moment is right for you. Here are the eight situations where, with the numbers in front of you, the answer is often to wait.

1. Income that is too new to have been tested

The stress test exists precisely because income can fall. The Office of the Superintendent of Financial Institutions sets the minimum qualifying rate for uninsured mortgages at the greater of the contract rate plus 2% and a floor of 5.25%. OSFI explains that the test helps borrowers keep making payments even if they experience negative financial shocks: a reduction in income, an increase in household expenses, or an increase in mortgage rates. CMHC applies the same qualifying rate to insured loans.

In other words, the rules test your current income against a higher rate. They do not test how long that income will last. A probation period, a first contract, a recent move to self-employment: that risk stays entirely on your side. No rule forbids you from buying. There is simply nobody else carrying it.

2. High interest debt that should go first

CMHC limits the gross debt service ratio (GDS) to 39% and the total debt service ratio (TDS) to 44% of gross annual income. GDS counts principal, interest, taxes and heating. TDS adds every other debt you carry. The principal and interest used are those of the loan with the insurance premium included, not the amount you think you are borrowing. CMHC also expects the lender to use documented heating costs for the property where they exist, and a well founded estimate where they do not.

Here is the detail that surprises people: for a credit card or an unsecured line of credit, the calculation uses a monthly payment of at least 3% of the outstanding balance, often more than the minimum payment you actually make. For a secured line of credit, it uses a payment amortized over 25 years. And 50% of condominium fees goes into both ratios.

Paying off the most expensive debt before buying does two things at once: it frees up cash and it increases the mortgage you qualify for. The order of operations matters more than the speed.

3. A borrowed down payment

For an insured loan on an owner-occupied one or two unit property, the minimum down payment is 5% of the first $500,000 of lending value plus 10% of the remainder. The lending value has to stay under $1,500,000; above that, mortgage loan insurance is no longer available. CMHC also requires at least one borrower to have a credit score of 600 or better.

CMHC calls savings, the sale of a property and a non-repayable cash gift from a close relative traditional down payments. An unsecured personal loan or an unsecured line of credit are non-traditional sources. They are still allowed for one or two unit properties when the loan-to-value ratio sits between 90.01% and 95% and the borrower has a strong credit history. The price is printed in the premium schedule: 4.50% of the loan instead of 4.00%.

The Home Buyers’ Plan lets you withdraw up to $60,000 from an RRSP, but that is a loan to yourself, repayable over 15 years. For a first withdrawal made between January 1, 2026 and December 31, 2028, the start of the repayment period is deferred to the fifth year following the withdrawal. Deferred is not cancelled.

4. A holding horizon that is too short

Entry costs do not come back. The transfer duty, the welcome tax, is calculated for 2026 at 0.5% on the first $62,900, 1.0% on the portion from $62,900.01 to $315,000, and 1.5% on anything above $315,000, applied to the greater of the sale price and the market value, the latter being the figure on the assessment roll multiplied by the comparative factor. A municipality may set a higher rate, up to 3%, on any portion above $500,000, and Montreal may go higher still. The detail is in the welcome tax guide.

Add the mortgage loan insurance premium, 4.00% of the loan at a 95% loan-to-value ratio. The premium can be added to the loan; the provincial sales tax that applies to it cannot, so that part is paid in cash. Revenu Québec sets the tax on insurance premiums at 9%, rising to 9.975% for premiums paid after December 31, 2026. Add the notary, the inspection, the move.

Leaving costs money too. Breaking a closed mortgage normally triggers a prepayment penalty that can run into thousands of dollars, and the Financial Consumer Agency of Canada adds administration fees, appraisal fees, reinvestment fees and a mortgage discharge fee, plus repayment of any cash back you received at the start. Then the broker’s remuneration on resale. If there is a real chance you move within three years, run the rent versus buy calculation first.

5. A separation or an estate that is not settled

Marriage and civil union create a family patrimony that includes all the residences used by the family, regardless of which spouse owns them. On legal separation, divorce or dissolution, the market value of the property is established, the debts contracted to acquire, improve or preserve it are subtracted, and the remaining net value is divided equally. Until that calculation is done, you do not know what your down payment is. Our markers are in the divorce and real estate guide.

An estate runs on its own clock: an inventory of the property by the liquidator, a declaration of transmission drawn up by the notary and the new rights registered in the Land Register, then a notice of closure of the final account. An inheritance is not a deposit with a due date. Do not sign a promise to purchase whose financing depends on one without a written condition.

6. A purchase driven by other people’s pressure

This one has no official number, and that is exactly the problem. “Renting is throwing money away” is a line, not an analysis. A deadline set by a parent, a partner or a colleague is not your deadline. The person who signs the mortgage carries it to the end, alone.

7. Falling in love and skipping the inspection

Article 1726 of the Civil Code of Québec is blunt: the seller is not bound to warrant an apparent defect, and a defect is apparent when it can be noticed by a prudent and diligent buyer without needing to resort to an expert. Waiving the inspection to win a bidding war moves that risk onto you, permanently. For cost and timing, read what an inspection costs and when to do it.

8. A budget with no margin at all

The 39% and 44% thresholds are regulatory ceilings, not targets. They are calculated at the qualifying rate, which is higher than your actual rate: that gap is a safety margin, not a budget to spend. Heating, property tax and half of the condo fees are already in the calculation. The special assessment, the water heater and the roof are not.

The question worth asking

None of these eight situations is permanent. In almost every case, six to eighteen months changes the numbers completely. A broker whose remuneration depends on a transaction has an obvious reason not to tell you to wait. That is exactly why the sentence is worth something when it gets said.

Torn between buying now and waiting a year? Write to me: we put your numbers on one page, and I tell you plainly which of the two scenarios holds up.