The short version
- The minimum down payment is 5% of the first $500,000 and 10% of the part above that, up to $1.5 million.
- An FHSA and the RRSP Home Buyers' Plan can together give one buyer up to $100,000 toward a down payment.
- First-time buyers in Toronto can get up to $8,475 back in land transfer tax.
- Get pre-approved before you book showings.
1. Work out your down payment
For homes under $1.5 million, the minimum down payment is 5% of the first $500,000 and 10% of any amount above $500,000. At $1.5 million and up, you need at least 20% (CMHC). With less than 20% down, your mortgage needs default insurance, and the premium is added to your mortgage.
| Home price | Minimum down payment | How it is calculated |
|---|---|---|
| $500,000 | $25,000 | 5% of $500,000 |
| $700,000 | $45,000 | $25,000 + 10% of $200,000 |
| $900,000 | $65,000 | $25,000 + 10% of $400,000 |
| $1,200,000 | $95,000 | $25,000 + 10% of $700,000 |
First-time buyers can choose a 30-year amortization on an insured mortgage, which lowers the monthly payment (CMHC). You will pay more interest over time, so we compare both options before you decide.
2. Use the two tax-free savings tools
First Home Savings Account (FHSA)
You can put in up to $8,000 a year, to a lifetime limit of $40,000. Contributions are tax-deductible, and qualifying withdrawals for your first home are tax-free (Canada Revenue Agency). Unused room carries forward, up to $8,000, but only after you open the account. Open one early, even with a small deposit.
RRSP Home Buyers' Plan (HBP)
You can withdraw up to $60,000 from your RRSP to buy your first home and pay it back over 15 years (Canada Revenue Agency). For a first withdrawal made between 2026 and 2028, repayments start in the fifth year after the withdrawal. The money must be in your RRSP for at least 90 days before you take it out.
Each buyer can use both, so a couple buying together could put up to $200,000 from these accounts toward the down payment.
3. Budget for closing costs
Plan for about 1.5% to 4% of the price on top of your down payment. In Toronto, the largest cost is usually land transfer tax, because you pay both the Ontario tax and the Toronto tax.
- Land transfer tax: on a $700,000 Toronto home it comes to $20,950 before rebates. First-time buyers can get up to $4,000 back from Ontario and up to $4,475 from Toronto, which brings it to $12,475 (Ontario, City of Toronto). See my land transfer tax guide.
- Legal fees and title insurance: your lawyer handles the closing and the title transfer.
- Home inspection: recommended for most resale homes.
- Adjustments: your share of property tax or condo fees the seller has already paid.
- Moving and setup: utilities, insurance and basic furniture.
4. Buying a new build? Check the GST rebate
First-time buyers of a newly built home can get back up to 100% of the GST, or the federal part of the HST, on homes valued up to $1 million, to a maximum of $50,000. The rebate shrinks between $1 million and $1.5 million and does not apply to resale homes (Canada Revenue Agency). The agreement with the builder must be signed on or after March 20, 2025, and before 2031. Ask about Ontario's relief on the provincial part of the HST as well (TRREB).
5. Get pre-approved, then shop
A pre-approval tells you your real budget and can hold a rate while you look. Lenders test you at the higher of your rate plus 2% or 5.25% (OSFI), so your approved amount is often lower than online calculators suggest. Read pre-approval vs. pre-qualification for what to bring.
6. Your step-by-step order
- Open an FHSA now, even if you are a year or more away.
- Check your credit report and pay down high-interest debt.
- Get a mortgage pre-approval.
- Choose neighbourhoods and must-haves with your agent.
- View homes, make an offer with the right conditions, and book an inspection.
- Remove conditions, finalize the mortgage, and hand everything to your lawyer.
- Close, get the keys, and claim your rebates.
Ready to plan your first purchase?
In a free 30-minute call, I will work out your real budget, your down payment sources and the rebates you can claim, and you can ask anything. No pressure and no obligation.
This guide is general information, not financial, legal or tax advice. Programs, rates and rules change; confirm the details for your situation before you act. Mortgage information is provided by Ashraful Khan, Mortgage Broker, Lic. #M22000883, Mortgage Alliance Inc., FSRA Licence #10530. Real estate information is provided by Ashraful Khan, Sales Representative, Royal LePage Ignite Realty, Brokerage, Independently Owned and Operated.