The Complete Guide
First-Time Home Buyer Guide
Ontario 2026
Everything you need to know about buying your first home in Ontario — from understanding your finances to getting the keys.
Table of Contents
Understanding Your Financial Position
Know Your Credit Score
Your credit score is the cornerstone of your mortgage application. In Canada, scores range from 300 to 900, with 680+ generally considered good for mortgage approval. Check your score through Equifax or TransUnion before you begin.
Calculate Your Budget
The general rule is that your total monthly housing costs (mortgage, property taxes, heating, condo fees) should not exceed 32% of your gross monthly income. Your total debt payments should not exceed 40%.
Assess Your Savings
Beyond the down payment, you will need 1.5-4% of the purchase price for closing costs, plus an emergency fund for unexpected repairs or expenses after you move in.
Down Payment Requirements
Minimum Requirements
In Canada, the minimum down payment depends on the purchase price: 5% for homes up to $500,000, 10% for the portion between $500,000-$999,999, and 20% for homes $1 million or more.
Sources of Down Payment
Acceptable sources include personal savings, RRSP withdrawals (Home Buyers' Plan allows up to $35,000), gifts from immediate family with a signed gift letter, and proceeds from the sale of another property.
CMHC Insurance
If your down payment is less than 20%, you will need mortgage default insurance (CMHC, Sagen, or Canada Guaranty). This protects the lender and is added to your mortgage.
Getting Pre-Approved
Why Pre-Approval Matters
A pre-approval tells you exactly how much you can afford, locks in an interest rate for 90-120 days, and shows sellers you are a serious buyer. It is not a commitment — you can still shop around.
Documents You Will Need
Prepare government ID, proof of income (pay stubs, T4s, Notice of Assessment), employment letter, bank statements showing down payment savings, and information about any existing debts.
The Stress Test
All buyers must qualify at the higher of their contract rate plus 2%, or 5.25%. This ensures you can still afford payments if rates rise.
Government Programs for First-Time Buyers
First-Time Home Buyer Incentive
The federal government offers 5-10% of the home price as a shared equity mortgage, reducing your monthly payments. You repay this when you sell or after 25 years.
Home Buyers' Plan (HBP)
Withdraw up to $35,000 from your RRSP ($70,000 per couple) tax-free for your down payment. You must repay it over 15 years starting the second year after withdrawal.
First Home Savings Account (FHSA)
A new registered account allowing you to save up to $40,000 tax-free for your first home. Contributions are tax-deductible, and withdrawals for a home purchase are tax-free.
Land Transfer Tax Rebates
Ontario offers up to $4,000 in land transfer tax rebates for first-time buyers. Toronto buyers may also qualify for a municipal rebate of up to $4,475.
Finding Your Home
Work with a Realtor
A buyer's agent represents your interests, has access to MLS listings, can schedule viewings, and helps with negotiations. Their commission is typically paid by the seller.
Know What You Need vs. Want
Make a list of must-haves (bedrooms, location, budget) versus nice-to-haves (finishes, layout preferences). Be prepared to compromise on wants, not needs.
Consider Future Needs
Think 5-10 years ahead. Will you need more space? Is the neighborhood developing? Are there good schools nearby? A home is a long-term investment.
Making an Offer
Key Conditions
Common conditions include financing (allows you to back out if mortgage falls through), home inspection (protects against hidden issues), and status certificate review (for condos).
Deposit
Your deposit (typically 5% of purchase price) is held in trust and forms part of your down payment. It shows good faith and is forfeited if you breach the agreement.
Negotiation
Your realtor will advise on offer strategy based on market conditions. In a buyer's market, you may negotiate below asking. In a seller's market, you may need to offer above.
Closing Costs Breakdown
Land Transfer Tax
Provincial tax based on purchase price. In Ontario, expect roughly 1-2% of the home price. First-time buyers receive rebates that can significantly reduce this.
Legal Fees
Your real estate lawyer handles title searches, document preparation, and fund transfers. Budget $1,500-$2,500 including disbursements.
Title Insurance
Protects against title defects, fraud, and survey issues. One-time cost of $300-$500, highly recommended for peace of mind.
Adjustments
You may owe the seller for prepaid property taxes or utility bills. Your lawyer will calculate these on closing.
After You Close
Home Insurance
Required before closing. Shop around for the best rates and ensure adequate coverage for the replacement cost of your home.
Utility Transfers
Contact hydro, gas, water, internet, and other providers to transfer or set up new accounts in your name.
Change of Address
Update your address with CRA, banks, employer, driver's license, health card, and subscriptions.
Budget for Maintenance
Set aside 1-3% of your home's value annually for maintenance and repairs. Homeownership comes with ongoing costs.
Ready to Begin?
Let me guide you through
your first purchase
As a first-time buyer, you deserve an agent who will take the time to answer every question. Let us start with a no-obligation conversation.
Related Resources
Calculator
Affordability Calculator
See how much home you can afford based on your income and debts.
Calculator
CMHC Insurance Calculator
Estimate your mortgage insurance premium based on down payment.
Resource
Document Checklist
Everything you need to gather for your mortgage application.