DERRICK Guides · 7 min read
First-Time Buyer Guide: Toronto & the GTA
Down payments, deposits, closing costs, and the rebates first-time buyers actually get in Toronto — explained in plain language.
Reviewed 2026-06-09 — regulatory figures are date-stamped in the text.
Buying your first home in the GTA is mostly a numbers problem before it’s a house problem. Here are the numbers that decide what you can do — accurate as of June 2026.
The minimum down payment isn’t a flat 5%
Canada’s minimum down payment is tiered by purchase price:
- 5% of the first $500,000
- 10% of the portion between $500,000 and $1.5 million
- 20% of anything at $1.5 million or above (insured mortgages are capped at $1.5M)
On an $800,000 home, that’s $25,000 + $30,000 = $55,000 minimum — about 6.9%, not 5%.
If you put down less than 20%, mortgage default insurance (commonly “CMHC insurance”) is mandatory. The premium is 2.80%–4.00% of the loan depending on your loan-to-value, and it’s added onto the mortgage rather than paid in cash. On that $800,000 example with the minimum down, the premium lands at 4.00% of the $745,000 loan — about $29,800 quietly added to what you owe.
A deposit is not a down payment
In Toronto, an offer is typically backed by a deposit of around 5% of the purchase price, due within about 24 hours of acceptance — as a bank draft or wire, from money you already have. It counts toward your down payment at closing, but you can’t wait for a mortgage advance to fund it. Buyers who forget this distinction lose deals.
Closing costs: budget 1.5–4% on top
Beyond the down payment: land transfer tax (the big one — Toronto charges it twice, provincial and municipal), legal fees, title insurance, and adjustments. As a first-time buyer you get meaningful relief: a rebate of up to $4,000 on Ontario’s land transfer tax and up to $4,475 on Toronto’s. See our land transfer tax guide and the calculator for your actual number.
The savings accounts built for you
- FHSA (First Home Savings Account): contribute up to $8,000 per year to a $40,000 lifetime maximum. Contributions are tax-deductible and qualifying withdrawals are tax-free — the best first-buyer vehicle in Canada right now.
- RRSP Home Buyers’ Plan: withdraw up to $60,000 from your RRSP tax-free for a first home (repayable over 15 years). You can combine it with the FHSA.
Know your real ceiling before you shop
Lenders qualify you at a stressed rate — your contract rate plus 2%, with a 5.25% floor — and cap your housing costs at 39% of gross income (GDS) and total debts at 44% (TDS). That usually matters more than your down payment. Our affordability calculator runs the same rules, including the stress test, so the pre-approval number won’t surprise you. The mortgage stress test guide explains why the rules exist.
Talk it through
Every situation has wrinkles — gifted down payments, variable income, condo fees. If you want a straight answer about yours, contact Derrick. No pressure, no spam — just the numbers as they apply to you. And if the Toronto numbers will not work, look at Orangeville — the same rebates stretch further there.