This post is for educational purposes only and does not constitute financial, legal, or mortgage advice. Always consult a qualified professional for your specific situation.
If you have typed "how to buy a home in Ontario" into a search bar, you are in exactly the right place. Whether you are a newcomer who arrived in Canada in the last few years or a Canadian who has been renting and is ready to own, the process is the same set of steps — and once you see them laid out end to end, it stops feeling overwhelming.
I know, because I bought my first home in Ontario. I have walked through pre-approval, the stress test, land transfer tax sticker shock, and closing day. This guide is the map I wish I had at the start: every stage, the real costs, the programs that actually still exist in 2026, and the specific rules that matter if you are on a work permit or recently became a permanent resident.
Let's walk through it step by step.
Step 1: Am I ready to buy a home in Ontario?
Before you fall in love with a listing, run through a quick readiness checklist. You are in good shape to start when:
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- Your credit is established and healthy. In Canada, lenders lean heavily on your credit history. If you are a newcomer building credit from scratch, read our guide on how to build a credit score in Canada from zero and confirm whether your credit history transfers to Canada (in most cases, it does not).
- You have a down payment saved — plus a cushion for closing costs on top of it (more on that in Step 7).
- Your income is stable and documentable. Lenders want to see that your monthly housing cost fits comfortably alongside your other debts.
- You have a rough budget. Before you talk to a single lender, get a realistic picture of what you can afford. Our residential real-estate calculator includes an affordability + stress-test tool and a mortgage-payment estimator so you can pressure-test a price range in a few minutes.
If a couple of these are not in place yet, that is fine — it just tells you where to focus first. Buying is a process, not a single leap.
Step 2: Understand Ontario's down-payment rules
The minimum down payment in Canada is set by the purchase price, and the tiers are national statutory rules (they apply in Ontario just like everywhere else):
| Purchase price | Minimum down payment |
|---|---|
| Up to $500,000 | 5% |
| $500,000 to $999,999 | 5% on the first $500,000, 10% on the portion above |
| $1,000,000 or more | 20% |
A worked example: on a $700,000 home, the minimum is 5% of $500,000 ($25,000) plus 10% of the remaining $200,000 ($20,000) = $45,000.
If your down payment is less than 20%, your mortgage must be insured — that is CMHC mortgage insurance, and the premium is added to your mortgage. It is a real cost to budget for, and our residential calculator will estimate it for you based on your price and down payment.
Step 3: Use the FHSA and RRSP Home Buyers' Plan to power your down payment
Two federal accounts let first-time buyers save toward a down payment with real tax advantages. Together they are the most powerful tools most Ontario buyers have.
- First Home Savings Account (FHSA). You can contribute up to $8,000 per year, to a $40,000 lifetime maximum. Contributions are tax-deductible (like an RRSP) and qualifying withdrawals for a home are tax-free (like a TFSA). If you are newer to registered accounts, start with our FHSA guide for newcomers.
- RRSP Home Buyers' Plan (HBP). You can withdraw up to $60,000 from your RRSP (or $120,000 for a couple buying together) toward your first home, and repay it over 15 years. See how the RRSP room works in our RRSP guide for newcomers.
Stack them and a couple can pull up to $100,000 per person ($40,000 FHSA + $60,000 HBP) toward a first home. Not sure which to fill first? We break it down in FHSA vs. RRSP for your first home, and if you are still choosing between registered accounts generally, FHSA vs. TFSA is a good primer.
A quick accuracy note: the old First-Time Home Buyer Incentive (the federal shared-equity program) stopped accepting new applications in 2024 and is no longer available. You will still see it mentioned on older blogs — ignore it and focus your energy on the FHSA and HBP, which are very much active. If you are buying a newly built home, ask your lawyer or a tax professional about the GST/HST new-housing rebate, which can apply to new construction.
Step 4: Budget for Ontario Land Transfer Tax (and Toronto's second one)
This is the cost that surprises the most first-time buyers, so plan for it early. When you buy in Ontario you pay provincial Land Transfer Tax (LTT) on a sliding scale, roughly:
| Portion of purchase price | Ontario LTT rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 – $250,000 | 1.0% |
| $250,000 – $400,000 | 1.5% |
| $400,000 – $2,000,000 | 2.0% |
| Over $2,000,000 (1–2 unit residential) | 2.5% |
If you buy in the City of Toronto, you pay a Municipal Land Transfer Tax (MLTT) on top of the provincial one — effectively doubling the land transfer bill. Buying just outside Toronto's boundary can meaningfully change your closing costs.
The good news for first-timers: first-time buyers can claim a rebate of up to $4,000 on the Ontario LTT, and Toronto first-time buyers can claim a further rebate of up to $4,475 on the MLTT. To see your exact bill for a specific price and city, use the Land Transfer Tax tool inside our residential calculator — it is the single fastest way to avoid a closing-day surprise.
Step 5: Get a mortgage pre-approval (and pass the stress test)
A pre-approval tells you how much a lender is willing to lend and locks a rate hold while you shop. To get one, a lender or mortgage broker reviews your income, debts, and credit.
Every federally regulated mortgage in Canada also has to clear the mortgage stress test: you must qualify at either your contract rate plus 2%, or the minimum qualifying rate, whichever is higher. In plain terms, the bank checks that you could still make payments if rates rose. Our full explainer on the mortgage stress test walks through it, and the affordability tool in the residential calculator applies the stress-test rule automatically.
Newcomer note (work permit vs. PR): you do not need to be a citizen to get a mortgage in Ontario. Permanent residents are generally treated like any other applicant. If you are on a work permit, financing is still very possible — some lenders have newcomer mortgage programs — but you may face a larger down-payment expectation or need a longer Canadian employment history. We cover the specifics in mortgages for newcomers: PR vs. work permit. Bring your work permit, PR card or landing paper, and proof of Canadian income when you meet a broker.
Step 6: Find the right property — region by region
Ontario is enormous, and where you buy changes almost everything about your budget. A few broad strokes as you narrow your search:
- The Greater Toronto Area (GTA). The deepest job market and the highest prices. Remember that buying inside Toronto's city limits triggers the extra municipal land transfer tax (Step 4), while nearby regions like Durham, Peel, or Halton do not.
- Ottawa. A large, stable government-anchored economy, generally more affordable than the core GTA, with its own distinct neighbourhoods and commuter towns.
- Mid-tier cities — Hamilton, London, Kitchener–Waterloo, Windsor, Kingston, Barrie. Lower entry prices and growing job markets; popular with first-time buyers priced out of the GTA and with newcomers looking for community and a shorter path to ownership.
When you compare neighbourhoods, weigh commute time, transit, schools, and how established the newcomer community is — practical factors that matter far more day to day than the listing photos. A good local real-estate agent who has worked with first-time buyers earns their keep here.
Step 7: Make an offer and budget for closing costs
When you find the home, your agent helps you submit an offer that includes your price, your deposit, and any conditions — commonly a financing condition and a home inspection condition. In a calmer market you have more room to keep those conditions in; in a competitive one, buyers sometimes waive them (which carries real risk — never skip due diligence lightly).
Once your offer is accepted, budget for closing costs on top of your down payment. A useful rule of thumb is to set aside roughly 1.5% to 4% of the purchase price for closing, which typically covers:
- Land Transfer Tax (the big one — see Step 4)
- Legal fees and disbursements (your real-estate lawyer)
- Title insurance
- Home inspection and, if applicable, an appraisal
- Adjustments — reimbursing the seller for prepaid property tax or utilities
Your lawyer handles the title search, reviews the agreement, and manages the transfer of ownership. On closing day you sign, the funds move, land transfer tax is paid, and you get the keys.
Step 8: After closing — the ongoing costs of owning in Ontario
Owning is not just the mortgage payment. Build these into your monthly budget from day one:
- Property tax. Set annually by your municipality as a percentage of assessed value — it varies a lot between cities, so check the rate where you are buying.
- Utilities. Heat, hydro, and water. Ontario winters make heating a real line item; a detached home costs far more to heat than a condo.
- Home insurance. Required by your lender, and separate from any title insurance you bought at closing.
- Condo or maintenance fees, if you buy a condo, plus a repair fund for a freehold home. Things break; a small monthly reserve saves you from scrambling.
Before you commit to a price, it is worth modelling whether buying or renting makes more sense for your situation and timeline — the rent vs. buy tool in our residential calculator does exactly that.
Your Ontario home-buying roadmap, at a glance
- Confirm you are ready — credit, down payment, stable income, a real budget.
- Learn the down-payment tiers (5% / 10% / 20%) and whether you will need CMHC insurance.
- Load up your FHSA and RRSP Home Buyers' Plan — up to $100,000 per person toward a first home.
- Budget for Ontario Land Transfer Tax (and Toronto's MLTT), and claim your first-time buyer rebates.
- Get pre-approved and pass the stress test.
- Choose a region that fits your budget and life.
- Make a smart, condition-protected offer and set aside closing costs.
- Plan for property tax, utilities, and insurance after you move in.
Buying your first home in Ontario is a big step, but it is a well-marked path. Take it one stage at a time, lean on the calculators to replace guesswork with numbers, and talk to a licensed mortgage broker and real-estate lawyer for advice specific to you.
For the full story of how I did it — the mistakes, the surprises, and what I would do differently — read How I bought my first home in Canada as a newcomer.
Recommended Reading
Buying your first home in Canada? These books will give you an edge:
📕 Burn Your Mortgage by Sean Cooper — A Toronto-based Canadian who paid off his mortgage in 3 years. Packed with practical strategies.
📗 97 Tips for Canadian Real Estate Investors by Don R. Campbell — Quick, actionable tips for anyone entering the Canadian real estate market.
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Written by Raunaq Singh, Founder of Maple Syrup Money.
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