First Time Home Buyer in Ontario
Buying your first home is an exciting step, but understanding how much you can afford, how much down payment you need and how the mortgage qualification process works can make the experience much easier.
I’m Wilson D’Souza, Mortgage Agent Level 2 with Mortgage Architects. I help first time homebuyers understand their mortgage options, plan their purchase and explore financing solutions based on their financial situation, goals and current lending guidelines
What does it mean to be a first time homebuyer?
The definition of a first time homebuyer can vary depending on the mortgage or government program you are considering.
For example, the eligibility rules for programs such as the First Home Savings Account and the Home Buyers’ Plan are not necessarily identical to the rules for Ontario’s first time homebuyer Land Transfer Tax refund.
It is important to look at the specific program and its eligibility requirements.
How much down payment do I need to buy my first home?
The minimum down payment depends on the purchase price of the home.
For an eligible insured mortgage:
• 5% on the first $500,000
• 10% on the portion of the purchase price between $500,000 and $1.5 million
For homes priced at $1.5 million or more, mortgage loan insurance is not available under the current high loan to value rules and a minimum 20% down payment is generally required.
Your actual down payment may be higher depending on your financial situation, the property and the lender’s requirements.
Can I buy my first home with less than 20% down?
Possibly.
If you meet the requirements for an insured mortgage, you may be able to purchase an eligible home with less than 20% down.
Mortgage default insurance is generally required when the down payment is less than 20%.
The insurance premium is based on factors including the mortgage amount and down payment, and it can generally be added to the mortgage.
How much mortgage can I qualify for as a first time homebuyer?
There is no single mortgage amount that applies to every first time buyer.
Lenders may consider:
• Your income
• Your employment history
• Your down payment
• Your credit history
• Your existing debts
• Your property taxes and other housing costs
• Your mortgage payment
• The purchase price and property type
Mortgage qualification also involves debt servicing calculations and, where applicable, the mortgage stress test.
What is the mortgage stress test?
The mortgage stress test is used by lenders to assess whether you can afford your mortgage payments if interest rates increase.
Your mortgage professional will consider the applicable qualifying rate when determining how much mortgage you may qualify for.
Your maximum mortgage qualification is therefore not based only on the interest rate you are being offered.
Can first time homebuyers get a 30 year mortgage?
Yes, eligible first time homebuyers can access insured mortgages with amortizations of up to 30 years under the current rules.
A longer amortization can reduce the required monthly payment compared with a shorter amortization, although it can increase the total interest paid over the life of the mortgage.
Whether a 30 year amortization is appropriate depends on your circumstances and the mortgage options available to you.
What is the First Home Savings Account?
The First Home Savings Account, or FHSA, is a registered account designed to help eligible Canadians save for a qualifying first home.
Eligible contributions can provide tax benefits, and qualifying withdrawals can be made tax free.
The eligibility rules include specific requirements relating to age, Canadian residency and previous home ownership.
Can I use my RRSP to buy my first home?
The federal Home Buyers’ Plan allows eligible individuals to withdraw up to $60,000 from their RRSP to buy or build a qualifying home.
The Home Buyers’ Plan has specific eligibility and repayment requirements.
For first withdrawals made between January 1, 2026 and December 31, 2028, the temporary repayment relief means the 15 year repayment period begins in the fifth year following the year of the first withdrawal.
Do first time homebuyers get a Land Transfer Tax refund in Ontario?
Eligible first time homebuyers in Ontario may qualify for a Land Transfer Tax refund of up to $4,000.
The eligibility requirements include specific rules around previous home ownership, principal residence and citizenship or permanent resident status.
If you are buying in Toronto, there is also a separate municipal Land Transfer Tax and a first time homebuyer rebate may be available in addition to the Ontario refund.
What documents do I need for a first mortgage?
The exact documents will depend on your employment, income and financial circumstances.
Common documents may include:
• Government issued identification
• Employment confirmation
• Recent pay stubs
• T4s and Notices of Assessment where applicable
• Bank statements showing the down payment
• Investment or RRSP statements where applicable
• Information about existing debts
• Property details
• Agreement of Purchase and Sale once you have an accepted offer
Different lenders may require different documentation.
Should I get pre approved before looking for a home?
A mortgage pre approval can help you understand your potential borrowing range and prepare for the home buying process.
However, a pre approval is not the same as a final mortgage approval. The property, documentation and other factors still need to be reviewed before a lender provides final approval.
Getting prepared before you start shopping can help you understand your budget and avoid surprises later.
What should first time homebuyers consider before buying?
Before purchasing your first home, consider:
• Your down payment
• Closing costs
• Monthly mortgage payments
• Property taxes
• Home insurance
• Condo fees, if applicable
• Utilities and maintenance
• Existing debts
• Your emergency savings
• Your short and long term plans
Being approved for a certain mortgage amount does not necessarily mean you should borrow the maximum available.
How can I get started as a first time homebuyer?
Every first time buyer’s situation is different.
I can help you review your income, down payment, debts, credit profile and home buying goals, and help you understand the mortgage options that may be available to you.
There is no obligation to proceed with a mortgage.
Let’s review your options
If you are planning to buy your first home and want to understand your mortgage options, let’s have a conversation before you start making offers.
Book a Strategy Call with Wilson D’Souza, Mortgage Agent Level 2 with Mortgage Architects.
