First-Time Home Buyers Guide — Ontario 2026
Everything you need to go from "thinking about it" to keys in hand — down payments, government programs, pre-approval, and closing costs explained simply.
Your 7-Step Path to Homeownership
Follow these steps in order. Each one builds on the last.
Check Your Financial Health
Review your credit score (aim for 680+), calculate your total debt service (TDS) ratio, and gather 2 years of tax returns, recent pay stubs, and 3 months of bank statements. Lenders want to see stable income and manageable debt.
Save Your Down Payment
Minimum 5% on homes up to $500K; 10% on the portion between $500K–$999K; 20% on homes $1M+. A larger down payment means lower CMHC insurance premiums and smaller monthly payments.
Max Out Your FHSA & RRSP
Contribute to your First Home Savings Account (up to $8,000/year, $40,000 lifetime — tax-deductible) and use the RRSP Home Buyers Plan (withdraw up to $35,000 tax-free, repay over 15 years). These accounts can dramatically boost your down payment.
Get Pre-Approved
A pre-approval locks in a rate for 90–120 days, shows sellers you're serious, and tells you exactly how much you can borrow. It takes about 15 minutes with us — we'll compare 50+ lenders to find your best rate.
House Hunt & Make an Offer
Work with a realtor to find your home. Include a financing condition in your offer — this protects you if your mortgage doesn't finalize. Your pre-approval letter gives your offer credibility.
Finalize Your Mortgage
Once your offer is accepted, we finalize the mortgage terms, submit to the lender, and order an appraisal if required. We handle all the paperwork so you can focus on packing.
Close & Get Your Keys
On closing day, your lawyer registers the property in your name and transfers funds to the seller. You'll pay closing costs (land transfer tax, legal fees, title insurance) and walk away with keys.
Down Payment Requirements
Canada has tiered minimum down payment rules. Here's what you need at common price points:
| Purchase Price | Min. Down Payment | CMHC Premium | Notes |
|---|---|---|---|
| $400,000 | $20,000 (5%) | $15,048 | Insured mortgage |
| $600,000 | $35,000 (5%+10%) | $22,044 | Insured mortgage |
| $800,000 | $55,000 (5%+10%) | $29,376 | Insured mortgage |
| $1,000,000 | $200,000 (20%) | $0 | No CMHC required |
CMHC premiums are added to your mortgage balance (not paid upfront). Rates above are approximate — your premium depends on your exact down payment %. OAC.
Government Programs & Incentives
Use every advantage available. Most first-time buyers leave money on the table.
Ontario HST Rebate — All Buyers (NEW)
- Full 13% HST removed on new homes for ALL buyers (not just first-time)
- Save up to $130,000 on new homes up to $1.5M
- Proportional rebate for homes valued $1.5M–$1.85M
- New home must be your primary residence or rental property
- Available April 1, 2026 – March 31, 2027 only
First-Time Buyer HST Rebate
- Full 13% HST rebate on new homes up to $1M (first-time buyers)
- Applies if you've never owned a principal residence anywhere
- Agreement of purchase and sale on or after March 20, 2025
- Available until December 31, 2030
First Home Savings Account (FHSA)
- Contribute up to $8,000/year (lifetime max $40,000)
- Contributions are tax-deductible (like an RRSP)
- Withdrawals are tax-free when used for a first home (like a TFSA)
- Unused room carries forward one year
RRSP Home Buyers Plan (HBP)
- Withdraw up to $35,000 tax-free from your RRSP
- Couples can withdraw up to $70,000 combined
- Must have been in your RRSP for at least 90 days
- Repay over 15 years (or add to taxable income)
Land Transfer Tax Rebates
- Ontario LTT rebate up to $4,000 (first-time buyers)
- Toronto municipal LTT rebate up to $4,475 (Toronto only)
- First-Time Home Buyers' Tax Credit: up to $1,500 federally
Closing Costs Checklist
Budget 1.5–4% of your purchase price on top of your down payment. Here's what you'll typically pay:
Good news for first-time buyers in Ontario: You qualify for the Land Transfer Tax rebate of up to $4,000 (and up to $4,475 more if buying in Toronto). This can significantly reduce your closing costs.
Frequently Asked Questions
What credit score do I need to qualify for a mortgage in Canada?
Most lenders require a minimum score of 620 for insured mortgages, and 680+ for the best rates. A score below 600 may qualify through alternative lenders at higher rates.
Can I buy a home with less than 5% down?
No — 5% is the Canadian minimum for homes under $500,000. However, some provinces offer down payment assistance programs. Our team can walk you through what's available in Ontario.
How long does mortgage pre-approval take?
As little as 15–30 minutes when you have your documents ready. We hold your rate for 90–120 days while you house hunt.
What's the difference between pre-qualification and pre-approval?
Pre-qualification is an informal estimate based on self-reported info. Pre-approval involves a full credit check and document verification — it's what sellers and realtors take seriously.
Do I need a lawyer to buy a home in Ontario?
Yes. Ontario law requires a real estate lawyer to handle the title transfer and fund disbursement on closing day. Budget $1,500–$2,500.
How much do I need saved beyond my down payment?
Plan for 1.5–4% of the purchase price in closing costs on top of your down payment, plus 3–6 months of mortgage payments in emergency reserves.
Ready to Take the First Step?
Get your free pre-approval in 15 minutes. We'll compare 50+ lenders and find the best rate for your situation — no obligation, no hard sell.
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