First-Time Home Buyer Guide Ontario (2025-2026 Edition)
Updated for 2025
Buying your first home in Ontario is a major milestone, and having a clear plan makes every step easier. This guide explains how pre-approval works, how to build your down payment, what monthly costs look like, and how far your budget goes in different regions including the GTA, Hamilton, and the Niagara Region. You’ll also find links to key incentives, calculators, and resources that help first-time buyers make confident decisions.
Answer Box
Quick Answer: Most first-time buyers begin by securing a mortgage pre-approval, planning their down payment, and budgeting for closing costs. A typical entry price ranges from $500,000 to $650,000 depending on region and property type. This guide shares practical steps, examples, and tools to help first-time buyers understand their options in today’s Ontario market.
Table of Contents
- Step 1: Secure Mortgage Pre-Approval
- Step 2: Build Your Down Payment
- Monthly Cost Snapshot
- If You’re Renting Now
- How Market Conditions Influence Buyer Options
- Condo vs Freehold
- Case Example: What a $650,000 Budget Buys
- Step 3: Plan for Closing Costs
- Ontario Home Buyer Incentives
- Next Steps
Step 1: Secure Mortgage Pre-Approval
A mortgage pre-approval outlines your maximum purchase price, estimated monthly payment, and rate hold period. Lenders review your income, credit score, debts, and savings to determine how much you can borrow. Most pre-approvals remain valid for 90 to 120 days. If you want a deeper explanation of how mortgage financing works for Ontario buyers, see our mortgage financing overview.
What lenders review
- Income and employment stability
- Credit score and repayment history
- Current debt obligations
- Down payment amount and source
- Estimated property taxes and heating costs
If you’d like help preparing for pre-approval, contact us.
Step 2: Build Your Down Payment
Your down payment influences affordability and determines whether mortgage insurance is required. Many first-time buyers contribute five to ten percent depending on their financial goals and savings timeline.
Minimum down payment rules
- 5 percent on the first $500,000
- 10 percent on the portion between $500,000 and $999,999
- 20 percent for homes priced at $1 million or more
If your down payment is under 20 percent, mortgage insurance is required. You can estimate your premium using the CMHC mortgage insurance calculator. This tool helps compare how different down payment sizes affect your total mortgage.
You can also review premium estimates again here: CMHC calculator.
What Monthly Costs Look Like at a $650,000 Purchase
Understanding monthly expenses helps set realistic expectations. Below is a typical range for a $650,000 purchase with a five percent down payment.
- Mortgage payment: $3,900 to $4,300 per month
- Property tax: $300 to $450 per month
- Condo fees (if applicable): $400 to $700 per month
- Utilities and insurance: $200 to $350 per month
If You’re Renting Now
Renters often benefit from planning at least three to six months ahead. Review your lease notice requirements, prepare your documents for pre-approval, and start tracking closing costs early. This gives you enough time to compare neighbourhoods and understand how far your budget goes.
How Market Conditions Influence Buyer Options
Interest rates, local supply, and seasonal activity influence what buyers can secure at each price point. In balanced markets, buyers may benefit from more choice and negotiating room. In busy markets, buyers may need to be flexible with location or property type.
Condo vs Freehold
Condos are often more affordable and include predictable monthly fees that cover exterior upkeep, building insurance, and shared amenities. Freehold homes offer more independence and space but require budgeting for future repairs. If you’re comparing condo options, see our condo buying guide.
Case Example: What a $650,000 Budget Buys Across Ontario
This comparison shows how far a $650,000 budget goes in Mississauga, Brampton, Vaughan, Hamilton, and the Niagara Region.
Buyer Profile
- Combined income: $150,000
- Down payment savings: $45,000
- Pre-approved purchase price: $650,000
- Goal: Space to grow without exceeding budget
How the Same Budget Performs in Different Regions
| Region | Typical Options | Notes |
|---|---|---|
| Mississauga | 1-bedroom condo ($520K–$550K); older 2-bedroom condo; select condo townhomes | Most first-time buyers secure a 1-bedroom condo. Larger units under $650K tend to be older. |
| Brampton | 1-bedroom or 1+1 condo; older 2-bedroom condo; stacked townhomes | Often offers slightly more space than Mississauga at the same price range. |
| Vaughan | 1-bedroom condo; small 1+1; older 2-bedroom condo; limited stacked townhomes | Most freehold homes exceed this budget. |
| Hamilton | 2-bedroom condo; modest freehold townhouse; small detached home | Provides stronger value and more property choice. |
| Niagara Region | Freehold townhouse; 2–3 bedroom detached home | Budget stretches the furthest here. See our GTA vs Niagara home search tips. |
What Buyers Learn From This Comparison
- Mississauga, Brampton, and Vaughan provide strong condo options for first-time buyers.
- Hamilton offers a mix of condos, freehold townhomes, and small detached homes.
- Niagara offers the most space and long-term value at this price point.
Step 3: Plan for Closing Costs
Most first-time buyers set aside three to four percent of the purchase price for closing costs. These expenses are paid on closing day and vary based on location and property type.
Common Closing Costs
| Cost | Details |
|---|---|
| Land Transfer Tax | Paid to the province, and an extra municipal tax applies in Toronto. Estimate your amount with TRREB’s Land Transfer Tax Calculator. |
| Legal Fees | Covers title searches, registration, and closing documents. For more details, see our closing costs guide. |
| Home Inspection | Optional but recommended to assess the home’s condition. |
| Title Insurance | Protects against title fraud, past registration errors, and undisclosed claims. |
Ontario Home Buyer Incentives
Ontario and federal programs can help eligible first-time buyers reduce upfront costs or increase their down payment. Below is a summary of the main programs. Full details and examples are available in our complete incentives guide.
RRSP Home Buyers’ Plan (HBP)
Allows eligible buyers to withdraw up to $60,000 from RRSPs (or $120,000 for a couple) for a down payment. Funds are repaid over 15 years.
First Home Savings Account (FHSA)
Lets buyers save up to $8,000 per year to a lifetime maximum of $40,000. Contributions are tax-deductible and withdrawals for a first home are tax-free.
Ontario Land Transfer Tax Refund
Eligible first-time buyers may receive up to $4,000 off the provincial land transfer tax.
Toronto Municipal Land Transfer Tax Rebate
Buyers purchasing within the City of Toronto may qualify for an additional rebate of up to $4,475.
First-Time Home Buyer Incentive (Shared Equity Program)
A federal shared-equity program that reduces monthly payments by contributing to the down payment. The government’s contribution is repaid upon sale or refinancing.
How These Price Ranges Are Determined
These figures reflect recent sales activity reported by TRREB, RAHB, and the Niagara Association of REALTORS.
Next Steps
Ready to start planning your first home purchase? We work with buyers across the GTA, Hamilton, and the Niagara Region to help them understand their options and make confident decisions.
FAQs
Most lenders require at least 5 percent down for homes under $500,000 and suggest budgeting 1.5 to 4 percent of the purchase price for closing costs, depending on location and mortgage type.
Inspections help avoid expensive surprises. A pre-offer inspection is ideal for competitive homes. Others complete it after conditions are accepted.
Yes. Many lenders allow gifted down payments from immediate family. You will need a signed gift letter confirming the funds are a true gift.
Most buyers should budget 3 to 4 percent of the purchase price for closing costs. These may include land transfer tax, legal fees, title insurance, and adjustments for property taxes or utilities.
You can explore renewal or refinancing options. Rates change often. Review scenarios with a mortgage professional.
The most common programs are the First Home Savings Account (FHSA), the Home Buyers’ Plan (HBP), and the Ontario Land Transfer Tax rebate. Toronto buyers may also qualify for an additional municipal rebate.
You’re not required to work with an agent, but most first-time buyers choose to. A Realtor helps with neighbourhood insights, offer strategy, negotiations, and reviewing potential issues in a property before you make a decision.
Condos are often the most affordable entry point in the GTA, while Hamilton and the Niagara Region offer more freehold options within first-time buyer budgets. The right choice depends on commute, lifestyle, and long-term plans.