Guide · 10 Steps · July 2026 Ontario Rules

First-Time Home Buyer
Ontario, 2026

A no-fluff, 10-step guide with real Ontario dollar examples: minimum down payment, LTT rebate math, First Home Savings Account, RRSP Home Buyers' Plan, and the full path from pre-approval to keys in hand.

Example home

$858.6K

Min down

$60.9K

FHSA + HBP

$200K

Timeline

~8 wks

Start Pre-Approval Affordability Calculator

The 10 steps.

Confirm you actually qualify as a First-Time Home Buyer

In Ontario, "First-Time Home Buyer" means (a) you have never owned an interest in a home anywhere in the world, and (b) if married or common-law, your partner has not owned a home you lived in during your marriage. This qualification opens up the Ontario Land Transfer Tax refund (up to $4,000), the Toronto Municipal Land Transfer Tax refund (up to $4,475 for Toronto purchases), and the federal First-Time Home Buyer Incentive programs. The 4-year "recovered FTHB status" rule from the 2022 federal Budget still applies: you can regain FTHB status if you haven't owned or lived in a home you or your partner owned in the last 4 years.

Save at minimum 5% down — 10% above $500K

Canada's minimum down payment on an insured mortgage is 5% of the first $500,000 of the purchase price and 10% of any portion above $500,000, up to a max property price of $1.5M (raised from $1M in the December 2024 rule change). On the example 858,600 home used throughout this guide, minimum down is $60,860 (5% of $500,000 = $25,000, plus 10% of $358,600 = $35,860, total $60,860). Above $1.5M the mortgage cannot be insured and you need 20% down.

Use the First Home Savings Account (FHSA)

The FHSA — introduced April 2023 — is the most tax-efficient down payment vehicle in Canadian history. Contribute up to $8,000/year (max $40,000 lifetime), deduct the contribution from your income like an RRSP, and withdraw tax-free to buy your first home like a TFSA. If you and your partner both open an FHSA, you jointly have $80,000 in tax-advantaged down payment room. Combined with the RRSP Home Buyers' Plan (step 4, up to $60,000 per person), a couple can pull ~$200,000 tax-free toward a down payment. Open one at any Canadian bank or broker even before you're actively shopping — unused contribution room carries forward 5 years.

Layer in the RRSP Home Buyers' Plan

The federal RRSP Home Buyers' Plan (HBP) lets you withdraw up to $60,000 per person from your RRSP tax-free to buy your first home. If you and your partner both have RRSPs, that's $120,000. The catch: you have to repay the withdrawal into your RRSP over 15 years starting the second year after withdrawal (recently extended from 5 years for withdrawals between 2022–2025). Use the HBP after maxing FHSA — HBP repayments cost you future tax-sheltered growth, FHSA doesn't.

Get pre-approved by a licensed Ontario mortgage broker

A real pre-approval — not a "how much can I afford" calculator estimate — requires income documents, credit pull, and a licensed mortgage agent to underwrite the file against 40+ lenders. Turnaround: 1 business hour at IndiBrick (see /rates for current wholesale rates), 24–48 hours at most traditional brokers. Ontario sellers weigh pre-approval letters by broker credibility — get one from a licensed brokerage (FSRA-registered) and confirm the letter names your maximum purchase price + rate hold. Rate holds are typically 90–120 days.

FSRA #12830 · Licensed Ontario

Skip the shopping — start the pre-approval now.

A licensed Ontario mortgage advisor will call you back within 1 business hour with your maximum purchase price + rate options from 40+ lenders. No hard credit check.

Ontario FTHB Pre-Approval

Licensed agent callback · 40+ lenders · No hard credit check

Calculate your actual affordability — GDS and TDS

Federally regulated lenders qualify you at the stress-test rate: the higher of your contract rate + 2%, or 5.25%. Your gross debt service ratio (GDS = mortgage payment + property tax + heat + ½ of condo fees, divided by gross monthly income) must be ≤ 39%. Your total debt service ratio (TDS = GDS + all other debt payments) must be ≤ 44%. On the example 858,600 home with 7% down and a 25-year amortization, the qualifying monthly payment at ~7.5% stress rate is about $5,750 — meaning your household needs ~$14,750 gross monthly income (~$177K/year) to qualify.

Budget the Ontario Land Transfer Tax (and Toronto MLTT)

Provincial Ontario Land Transfer Tax on a 858,600 home is $13,647 before the First-Time Home Buyer refund (up to $4,000). If the property is in Toronto, you also pay the Toronto Municipal LTT at the same bracketed rate, so combined ON + Toronto LTT before refunds ≈ $27,294. FTHBs in Toronto qualify for a second refund of up to $4,475 on the MLTT portion, bringing the net LTT on an $858,600 Toronto purchase to roughly $18,819. Outside Toronto, the same purchase price nets ≈ $9,647 after the provincial FTHB refund. Use /land-transfer-tax-calculator-ontario for the exact number at any purchase price.

Set aside 1.5–4% of purchase price for closing costs

Beyond down payment and LTT, closing costs include: lawyer fees ($1,500–$2,500), title insurance ($300–$500), home inspection ($400–$800), property valuation ($350 if not waived), CMHC/Sagen/Canada Guaranty premium if <20% down (added to your mortgage balance, but PST on the premium is due at closing — 8% in Ontario, so ~$1,500–$3,500), and property tax adjustment. Rule of thumb: budget 1.5–4% of purchase price. On the example home, that's $13,000–$34,000. Confirm exact numbers with your lawyer 2 weeks before closing.

Choose your term, rate type, and amortization

Ontario first-time buyers most commonly choose a 5-year fixed rate (interest rate certainty, penalty is capped at 3 months' interest if you break early) or a 5-year variable rate (rate moves with the Bank of Canada, penalty is 3 months' interest fixed). Under the December 2024 amortization rule change, first-time buyers on new construction can now stretch amortization to 30 years (previously 25 max on insured mortgages) — this drops the monthly payment ~9% at the cost of ~$40K more interest over the life of the mortgage on the example home. See /rates for current fixed vs. variable spreads.

Close cleanly — condition removal to funding

An accepted offer in Ontario typically carries a 5–10 day condition period (financing + inspection). Your broker files the funding request within 24 hours of condition removal; the lender issues instructions to your lawyer 3–5 days before closing; funds transfer on the closing date. Common failure modes: (a) a credit line inquiry after pre-approval that changes your debt profile — avoid all new credit until after closing; (b) a job change between pre-approval and closing — most lenders will re-verify employment 48 hours before funding; (c) an appraisal that comes in below purchase price — you top up the difference in cash or renegotiate.

The four programs to combine.

First Home Savings Account (FHSA)

Deposit up to $8,000/year, $40,000 lifetime. Contribution is tax-deductible (like RRSP), withdrawal for a first home is tax-free (like TFSA). Best-in-class tax vehicle.

RRSP Home Buyers' Plan (HBP)

Withdraw up to $60,000 from your RRSP tax-free. Repay over 15 years starting year 2 after withdrawal. Best used after FHSA is maxed.

Ontario LTT Refund

Up to $4,000 refund on Ontario Land Transfer Tax for first-time buyers. Applied at closing by your real estate lawyer. Toronto adds up to $4,475 more on Municipal LTT.

30-Year Amortization (new build)

First-time buyers of new-construction homes can now use a 30-year amortization on an insured mortgage (up from 25). Drops monthly payment ~9%.

FAQ

The questions Ontario first-time buyers ask most.

What is the minimum down payment for a first-time home buyer in Ontario?

5% of the first $500,000 of the purchase price, plus 10% of any portion between $500,000 and $1,500,000. Purchases above $1.5M require 20% down (no mortgage insurance available). On a 858,600 Ontario home, minimum down is $60,860.

How much is the Ontario Land Transfer Tax refund for first-time home buyers?

Up to $4,000 on provincial Land Transfer Tax. If the property is in Toronto, you also qualify for up to $4,475 refund on the Toronto Municipal Land Transfer Tax. Both refunds are applied at closing by your lawyer — you don't need to claim them separately.

Can I combine the FHSA and RRSP Home Buyers' Plan?

Yes. As of April 2023, you can use both simultaneously. Withdraw up to $40,000 from your FHSA tax-free and up to $60,000 from your RRSP under the HBP tax-free — the CRA does not require you to choose between them. For a two-person household with maxed FHSA and RRSP HBP: $80,000 + $120,000 = $200,000 in combined tax-advantaged down-payment room.

What credit score do I need to buy a home in Ontario in 2026?

Big-bank / A-lender minimum is a Beacon score of 680 for both applicants on a high-ratio insured mortgage. 720+ opens up the best-priced products (deep-discount rate specials from monoline lenders). Below 680 you're into B-lender territory (Home Trust, Equitable, HomeQuest) with rates 100–250 basis points higher and lender fees of 1%. Below 600 you're looking at private mortgages at 8–12% with 2–4% lender fees.

How long does the first home buying process take in Ontario?

Fastest realistic timeline from "I want to buy" to "I have keys": ~8 weeks. Pre-approval (1 week), house hunting (2–4 weeks), accepted offer + condition period (1 week), condition removal to closing (typically 30–60 days). Slowest realistic timeline is 6 months if you're still saving down payment or waiting for a new-construction closing.