Jane Peng — Chinese Real Estate Agent in Mississauga & Oakville Jane Peng Chinese Real Estate Agent in Mississauga & Oakville

If you’re planning to buy a home, your credit score is one of the first things a lender looks at. As a rough guide, most big banks want a score of about 660–680 or higher to approve a mortgage — and for their best rates, 760 or higher is where you want to be.

Check your score — it’s free now

You no longer need to pay to see your score (when I first wrote this, Equifax charged $24.99!). Today you can check free, as often as you like, and checking your own score does not hurt it:

• Borrowell — free Equifax score, updated weekly
• Credit Karma — free TransUnion score
• Your own bank’s app — most major banks now show your score free in online banking

(Your score from Equifax is sometimes called a “beacon score.” Equifax and TransUnion are Canada’s two credit bureaus, and your two scores may differ slightly — that’s normal.)

Quick ways to build or fix your score

1. Don’t apply for a stack of new cards. Every application can leave a mark. Two or three cards are plenty — and if you have no credit card yet, get one early and start building history well before you buy.
2. Pay in full, on time, every time. Payment history is the biggest factor. Set up automatic payments so you never miss one.
3. Keep balances low. Use no more than 30% of each card’s limit — under 10–15% is even better for your score.
4. Don’t rush to cancel old cards. Your oldest card carries your longest history, which helps you. Closing cards right before a mortgage application can actually lower your score. (My earlier version said “cancel unused cards at once” — advice has changed; keep the old card, just don’t use it much.)
5. Check your report for errors. Wrong late payments and accounts that aren’t yours do happen — dispute them with the bureau.
6. It’s not just credit cards. Cell phone bills, car loans, and student loans also affect your credit. Keep all of them current, with no debts in collections.

Start at least 6–12 months before you plan to buy, and your future self — and your mortgage rate — will thank you.

Want a second set of eyes on your buying plan? I’m glad to help you get ready — janepenghomes@gmail.com.

One of the best tax breaks in Canada: when you sell your principal residence, the capital gain is generally exempt from tax. But what exactly counts as a principal residence? Here are the criteria:

• You own the property (alone or together with someone else).
• One per family: you, your spouse or common-law partner, and your children can designate only one property as the family’s principal residence for each year.
• You ordinarily live in it at some point during the year — it’s your home, not mainly a rental or business property.
• Land limit: the land under and around the home counts as part of the principal residence only up to 0.5 hectare (about 1.24 acres). Any land beyond that is excluded — unless you can prove the extra land is necessary for your use and enjoyment of the home.
• You designate it as your principal residence for the year on your tax return.

An important change since 2016

Even though no tax is owing, you must report the sale of your principal residence on your tax return for the year of the sale (on Schedule 3) and make the designation. If you forget, the CRA can charge late-designation penalties — so don’t skip this step just because the sale is tax-free.

A few situations need extra care: converting a home into a rental (or a rental into a home), owning a larger property with extra land, or splitting your time between two homes. The rules are detailed, and everyone’s situation is different — for tax advice on your own sale, talk to a qualified tax professional. For the official rules, see the CRA’s pages on the principal residence exemption.

Planning to sell in Mississauga or Oakville and wondering what your home is worth today? I’m happy to prepare a free, no-obligation evaluation — janepenghomes@gmail.com.

Buying your first home? The Home Buyers’ Plan (HBP) lets you borrow money from your own RRSP — tax-free — to put toward your down payment.

The limit went UP. Since April 2024, you can withdraw up to $60,000 from your RRSP under the HBP (it used to be $35,000 — and $25,000 when I first wrote about this!). If you and your spouse or partner are both first-time buyers, that’s up to $120,000 combined.

How do you qualify?

• You are a resident of Canada when you withdraw the money.
• You are a first-time home buyer — generally, neither you nor your spouse/partner lived in a home that either of you owned during the current year or the previous 4 calendar years.
• You have a written agreement to buy or build a qualifying home in Canada, and you plan to live in it as your principal residence within 1 year.
• Watch the 89-day rule: RRSP contributions you make in the 89 days right before your HBP withdrawal may not be fully tax-deductible — you can only deduct up to your RRSP's value after the withdrawal. To keep the full deduction, contribute at least 90 days before you withdraw.
• You must buy or build the home before October 1 of the year after your withdrawal.

How does repayment work?

• You have 15 years to pay the money back into your RRSP, in yearly instalments of 1/15 of what you withdrew.
• Repayment normally starts in the 2nd year after your withdrawal. Good news: the start is pushed to the 5th year if your first withdrawal was between January 1, 2022 and December 31, 2028. Budget 2024 first brought in this relief for 2022–2025 withdrawals, and the Spring Economic Update 2026 (passed in Bill C-30) extended it through 2028 — so a first withdrawal in 2026 doesn't need its first repayment until 2031.
• If you miss a yearly payment, that year’s amount (1/15) is added to your taxable income for that year.

To withdraw, simply ask your bank or RRSP issuer to complete CRA Form T1036 with you. Full details are in the CRA’s guide RC4135, Home Buyers’ Plan (HBP).

Thinking about your first home in Mississauga or Oakville? I’d be happy to walk you through the numbers — reach me at janepenghomes@gmail.com.