Buying your first home

Talk to a lender or mortgage professional about a pre-approval. It shows how much you may be able to borrow, and it often holds an interest rate for a set time.

Lenders check that you could still make your payments at a higher “qualifying” rate: the greater of your mortgage rate plus 2% or 5.25%.

If the price is under $1.5 million, the minimum down payment is 5% of the first $500,000 and 10% of the rest. At $1.5 million or more, it's 20%. With less than 20% down, the mortgage needs mortgage default insurance, which adds a premium.

First-time buyers with an insured mortgage can choose a 30-year amortization (the time it takes to pay off the mortgage).

• First Home Savings Account (FHSA): Eligible individuals receive $8,000 of participation room in the year they open their first FHSA, with additional annual room and a lifetime participation limit of $40,000. Unused room may be carried forward within the program's limits. Contributions are generally tax-deductible, and qualifying withdrawals to buy a home are tax-free.
• RRSP Home Buyers' Plan (HBP): Eligible individuals may withdraw up to $60,000 each from their RRSPs to buy or build a qualifying home without immediate income tax on the withdrawal. Amounts generally must be repaid over 15 years. The first repayment year depends on when the first withdrawal is made and the applicable repayment-relief rules.
• Ontario land transfer tax refund: Eligible first-time homebuyers may receive a refund of up to $4,000 of Ontario land transfer tax.
• Toronto land transfer tax rebate: Properties within the City of Toronto, including North York, are also subject to Toronto's municipal land transfer tax. Eligible first-time homebuyers may receive a municipal rebate of up to $4,475, in addition to any Ontario refund they qualify for.
• New-home GST/HST rebates: Eligible first-time homebuyers purchasing a newly built or substantially renovated home as their primary residence may qualify for federal and Ontario GST/HST rebates. Eligibility and amounts depend on the home's value, relevant purchase and construction dates, and other program requirements. Ask your lawyer or tax adviser to confirm the rebate available for your specific purchase and whether it is already reflected in the builder's price.

Each program has its own eligibility requirements and definition of a first-time homebuyer. Qualifying for one program does not automatically mean you qualify for another. Confirm your eligibility using the official program guidance and advice from the appropriate professional.

Besides your down payment, budget for purchase, closing and moving expenses, including:

• Ontario land transfer tax and, for properties within Toronto, municipal land transfer tax, less any refunds or rebates you qualify for.
• Your real estate lawyer's fees, disbursements and applicable title insurance.
• A home inspection, if arranged.
• Mortgage default insurance, if required. The premium can generally be added to your mortgage or paid upfront. In Ontario, provincial sales tax on the premium must be paid separately and cannot be added to the mortgage.
• Closing adjustments, such as reimbursement for property taxes or other applicable prepaid expenses covering the period after closing.
• Moving expenses.
• For a new home, any applicable GST/HST and additional builder charges specified in your purchase agreement.

Ask your lawyer and lender for an estimate of the funds you will need to complete your purchase.

Setareh helps you explore homes that suit your budget, needs and preferred communities. She guides you through reviewing listings, arranging viewings, preparing an offer and considering appropriate conditions, including financing and inspection where relevant.

She helps coordinate the transaction with your lender, real estate lawyer and home inspector, while each professional advises you within their area of expertise.

This page provides general information, not legal, financial or tax advice. Program rules and eligibility requirements may change.