Buying your first home in Ontario

Most first-time buyers are told they need to earn more. Far more often the thing standing in the way is cash — the down payment, plus several thousand dollars of closing costs that cannot be borrowed. This guide sets out what the rules actually require, which federal programs can legally fund it, and what today’s prices mean where you’re looking.

What you have to put down

The minimum down payment in Canada is set by price, in two tiers: 5% of the first $500,000, then 10% of everything above it. On a $700,000 home that is $45,000 — not the $35,000 a flat five percent would suggest.

At or above $1,500,000 mortgage default insurance is not available at all, and the down payment jumps to a full 20%. That threshold is a cliff rather than a slope: it is why a home priced just under it can be far easier to buy than one priced just over.

The premium, and the part you cannot finance

Putting down less than 20% means the mortgage must be insured. The premium itself is normally added to the mortgage and paid off over the life of the loan, so it does not need to be found up front.

The Ontario 8% provincial sales tax on that premium is different — it is due in cash at closing and cannot be rolled into the mortgage. It is one of the most commonly missed numbers in a first purchase, and on a typical entry-level home it runs to several hundred dollars on top of everything else.

Where the down payment comes from

Two federal programs exist specifically to fund a first purchase, and they can both be used for the same home — they are not alternatives. Together they allow up to $100,000 per buyer.

• First Home Savings Account (FHSA) — $8,000 of room per year up to a $40,000 lifetime limit, so 5 full years of contributions reach the maximum. Contributions are generally deductible like an RRSP, and a qualifying withdrawal to buy your first home comes out tax-free like a TFSA. Your room is created when you open the account, not when you become eligible — waiting three years to open one leaves you with $8,000 of room, not $24,000. Once it exists, unused room carries forward, capped at one extra year ($16,000 in a single year at most).
• RRSP Home Buyers’ Plan (HBP) — withdraw up to $60,000 from your RRSPs tax-free, repayable over 15 years. Repayment normally starts the second year after the withdrawal, but temporary relief defers it by three more years for first withdrawals made from 2022 through 2028 — a withdrawal in 2026 is first repaid in 2031. Anything not repaid in a given year is added to your income for that year.

Program figures are current as of August 2026 and come from the Canada Revenue Agency. Eligibility for both turns on what counts as a first-time buyer and a qualifying home, which are narrower than they sound — confirm your own position with the CRA or a tax professional before counting on either.

What you get back at closing

Ontario refunds first-time buyers up to $4,000 of provincial land transfer tax. Buying in the City of Toronto means a second, municipal land transfer tax — and a second first-time-buyer rebate of up to $4,475. A Toronto buyer can therefore claim both, while the same purchase anywhere else in Ontario attracts one tax and one rebate.

These are rebates against a tax you owe, not cash grants: they reduce a closing cost rather than adding to your down payment.

The 30-year amortization

An insured mortgage normally amortizes over at most 25 years. First-time buyers — and anyone buying a newly built home — can stretch that to 30. It lowers the monthly payment and meaningfully raises the price you qualify for, which is why it is worth knowing about.

It is not free: the insurance premium is higher, and you pay interest for five additional years. It buys access, not savings. Which way that trade falls depends on your own numbers.

Work out your own number

The figures above are the rules. Your budget depends on your income, your debts and what you have saved — so put your own numbers into the calculators rather than working from an example. Nothing you type into them is stored, sent, or added to a web address.

Mortgage insurance and down-payment rules current as of August 2026. Estimates only. Not financial, legal, tax, or mortgage advice. Confirm with your lawyer, lender, or mortgage professional. General information only — not tax advice.