A step-by-step Ontario guide to the down payment, mortgage qualification, FHSA, Home Buyers’ Plan, land transfer tax rebates and closing cash.
Four points to remember
- Start with an affordability range before choosing a property price.
- Insured mortgages may allow a 30-year amortization for first-time buyers, subject to current program and lender rules.
- Eligible buyers may combine an FHSA withdrawal with the Home Buyers’ Plan.
- Budget for land transfer tax, legal fees, adjustments and moving costs in addition to the down payment.
Start with an affordability range
The first number to calculate is not the maximum listing price—it is a payment and cash range that still leaves room for property tax, heating, condo fees, repairs and everyday life. Lenders commonly review gross debt service and total debt service ratios, then qualify the mortgage at the applicable stress-test rate.
- Enter gross household income and monthly debts
- Test more than one interest-rate scenario
- Set a personal payment ceiling below the theoretical maximum
- Keep an emergency reserve after closing
Build the down payment
For an owner-occupied purchase below the insured-mortgage price cap, the minimum down payment is generally 5% of the first $500,000 and 10% of the portion above $500,000. A down payment below 20% normally requires mortgage default insurance. The exact eligibility and premium are lender- and insurer-approved.
- Confirm the source of every deposit
- Keep a clear 90-day account history
- Document gifts with the lender’s required form
- Do not borrow new money without checking qualification impact
Use first-home savings programs carefully
The FHSA may provide up to $8,000 of annual contribution room and a $40,000 lifetime contribution limit. The Home Buyers’ Plan currently permits an eligible RRSP withdrawal of up to $60,000. The two programs may be used for the same qualifying home if all conditions are met.
- Verify that you meet each program’s definition of first-time buyer
- Coordinate withdrawal timing with your lawyer and lender
- Remember that Home Buyers’ Plan withdrawals have repayment requirements
- Keep CRA documents with your closing records
Calculate closing cash before making an offer
Ontario land transfer tax, Toronto municipal land transfer tax when applicable, legal work, title insurance, appraisal, home inspection, adjustments and moving expenses can create a meaningful gap between the down payment and total cash needed. Eligible first-time buyers may receive up to $4,000 from Ontario and up to $4,475 from Toronto, but the closing lawyer should confirm eligibility.
- Run the closing-cost calculator for the exact city
- Separate your deposit from the remaining down payment
- Leave a buffer for property-tax and utility adjustments
- Ask the lawyer which funds must be delivered before closing
Prepare the approval file in the right order
A clean application makes it easier to compare lenders. Collect identification, employment and income records, down-payment history, debt statements and the purchase agreement. A pre-approval is useful planning information, but it is not a final approval of a specific property.
- Step 1: calculate affordability
- Step 2: organize income and down-payment documents
- Step 3: compare mortgage structure—not rate alone
- Step 4: make the offer with suitable conditions
- Step 5: complete appraisal, lender conditions and legal closing
Frequently asked questions
Can a first-time buyer use a 30-year amortization in Canada?
An insured mortgage may allow a 30-year amortization for an eligible first-time buyer and for an eligible new-build purchase. The lender and mortgage insurer must approve the application.
Can I use both the FHSA and Home Buyers’ Plan?
Yes, eligible buyers may use a qualifying FHSA withdrawal and a Home Buyers’ Plan RRSP withdrawal for the same qualifying home if all conditions are met.
Does a pre-approval guarantee the mortgage?
No. Final approval still depends on the property, appraisal, verified documents, lender conditions and any material change in the borrower’s finances.
Official sources and verification
This guide prioritizes primary information from governments, regulators and CMHC. Mortgage policies change; confirm the rules that apply when you apply.
This guide and its calculators are for general education only—not an approval, commitment, or legal, tax or investment advice. Actual rates, fees, underwriting and product terms vary by lender and application.