Buying a home in Toronto
The two questions that decide everything: what you can borrow, and what you need in cash on closing day. Let's get both answered properly before you start looking.
- A real pre-approval, underwritten — not an online estimate
- Clear cash-to-close figure including land transfer tax
- 30+ lenders, including ones that treat your income type differently
- Rate held while you shop, typically 90 to 120 days
- Free, and no credit check for an initial read
Thank you
Your details are with me. I will call you within 1 business day from (647) 761-1646 — please save my number so you recognise the call.
- A 10-minute call to confirm your goals and numbers.
- I check your file against 30+ lenders and send you the realistic options.
- If it makes sense, we apply. If it doesn't, I tell you that too.
What down payment you actually need
Canada's minimum down payment is tiered, not a flat percentage, and the tiers are where Toronto buyers get caught out. The rules, from the Financial Consumer Agency of Canada:
- $500,000 or less — 5% of the purchase price.
- Between $500,000 and $1.5 million — 5% of the first $500,000, plus 10% of everything above it.
- $1.5 million or more — 20% minimum, and mortgage insurance is not available at all.
Worked through at Toronto prices:
$900,000 → $25,000 + 10% of $400,000 = $40,000 → $65,000
$1,200,000 → $25,000 + 10% of $700,000 = $70,000 → $95,000
$1,500,000 → 20% of the full price → $300,000
Notice the cliff. Going from $1,499,000 to $1,500,000 roughly triples the down payment required, because you cross out of insurable territory entirely. That single line decides which homes are realistically available to you, and it is worth knowing before you fall in love with a listing. The insured price ceiling was raised from $1 million to $1.5 million effective 15 December 2024 — some pages online, including a government one, still quote the old $1 million figure.
Below 20% down, mortgage default insurance is mandatory. The premium is a percentage of the loan — from 0.60% at low loan-to-value ratios up to 4.00% at 95% — and it is added to your mortgage. One important Ontario detail: the PST on that premium cannot be added to the loan. It is cash you need on closing day. Full breakdown in the down payment guide.
Can you get a 30-year amortization?
On an insured mortgage the maximum amortization is 25 years, with 30 years available if either of these is true — it is an either/or test, not both:
- At least one borrower is a first-time buyer, or
- the property is newly built and has never been occupied.
That either/or version took effect 15 December 2024; before then both conditions were required, which is why older articles describe it as far more restrictive. It applies to high-ratio, owner-occupied purchases.
The first-time-buyer definition is broader than people assume: you qualify if you have never owned a home, or have not occupied a home owned by you or your current spouse in the current year or the previous four, or have recently separated. So a previous owner can become a first-time buyer again.
The trade-off: CMHC charges a 0.20% premium surcharge for first-time buyers choosing 30 years. You get a lower monthly payment and pay more interest over the life of the mortgage. Whether that is worth it depends on whether the lower payment is what gets you qualified at all.
Closing costs Toronto buyers forget
Your down payment is not the whole cash requirement. Budget roughly 1.5% to 4% of the purchase price on top, depending mostly on land transfer tax.
| Cost | What to expect |
|---|---|
| Ontario land transfer tax | Payable on every Ontario purchase, on a sliding scale by price. First-time buyers can claim a provincial rebate. |
| Toronto municipal land transfer tax | Only inside the City of Toronto — which includes North York, Scarborough, Etobicoke, York and East York. A second, separate tax roughly matching the provincial one. First-time buyers can claim a municipal rebate of up to $4,475. |
| PST on mortgage insurance | If you are putting less than 20% down. Cannot be added to the mortgage — needed in cash. |
| Legal fees and disbursements | Your lawyer's fee plus title search, registration and title insurance. |
| Home inspection | Optional but advisable on freehold. Often skipped in competitive offers, which is a risk worth understanding. |
| Status certificate (condos) | Your lawyer reviews the corporation's finances, reserve fund and any litigation. Worth every dollar. |
| Adjustments on closing | Prepaid property tax and utilities the seller has already covered, reimbursed to them. |
Buying outside the City of Toronto — Mississauga, Brampton, Vaughan, Markham, Richmond Hill — means you pay only the provincial land transfer tax, not the municipal one. On a typical GTA purchase that difference is thousands of dollars.
The order to do things in
Most buyers do these in the wrong order and lose a house because of it.
- Pre-approval before viewingsA real pre-approval means a lender has reviewed your income documents and credit and committed to an amount and a held rate. An online calculator has done none of that. The difference shows up when you are competing.
- Know your cash-to-close, not just your down paymentI give you one number: down payment plus land transfer tax plus legal plus insurance PST. That is what has to exist in your account.
- Shop with a firm ceilingPre-approval gives you a maximum. It is not a target. The payment you are comfortable with is usually below the payment you qualify for.
- Offer with a financing condition where you canIn a competitive market you may be pushed to waive it. Understand the risk before you do — a pre-approval is not a guarantee the lender will approve that specific property.
- Property approval after the offerThe lender underwrites the home as well as you: appraisal, and for a condo the corporation's financial health. Deals fail here, not at pre-approval.
- Lawyer, funding, keysYour lawyer handles registration and closing. Funds move on the closing date.
If your income is not a simple paycheque
Salaried, full-time, two years at the same employer is the easy file. Most Toronto buyers are not that, and lenders differ enormously in how they treat the alternatives.
Self-employed or incorporated
Your tax return shows income after write-offs, which is the point of good accounting and the problem for mortgage qualification. Some lenders work from business bank statements or add back certain deductions. Self-employed mortgages.
New to Canada
Programs exist for newcomers with limited or no Canadian credit history, including some that accept international credit references or a larger down payment instead. New to Canada mortgages.
Commission or variable income
Lenders generally average two years and may haircut it. How they average, and whether they use your gross or your net, varies and materially changes what you qualify for.
First-time buyer
You may be eligible for a 30-year amortization, the land transfer tax rebates, the Home Buyers' Plan, and on a new build the first-time buyers' GST rebate. First-time buyer mortgages.
Buying a pre-construction condo
Financing a pre-construction closing is its own exercise — the appraisal happens years after you signed, and lenders are cautious. Start the conversation well before your occupancy date.
Bruised credit
A past missed payment or a collection does not end the conversation. Alternative lenders price for credit history rather than declining on it, with a plan to move back to an A-lender at renewal.
Honest answers
How much down payment do I need for a $900,000 house in Toronto?
What is the minimum down payment on a $1.2 million home in Toronto?
How much mortgage can I afford?
How long is a mortgage pre-approval good for in Ontario?
Do I need 20% down to buy in Toronto?
Can I get a mortgage pre-approval without hurting my credit?
What is the difference between pre-qualification and pre-approval?
Should I waive my financing condition to win a bidding war?
Related
Get a pre-approval you can actually rely on
Underwritten, with a held rate and a clear cash-to-close number — so you know exactly what you can offer before you start looking.
Aleksey Tsoy · Mortgage Agent (Level 1) · Licence #M20001520 · Centum Financial Services LP · Brokerage Licence #13054