đź’° Down Payment Tips for First-Time Home Buyers in Ontario, Canada
Buying your first home is one of the biggest financial milestones of your life. If you’re starting the journey in Ontario, one of the most important steps is understanding and preparing for your down payment.
Here are some practical and helpful tips to make your path to homeownership smoother.
1. Understand the Minimum Down Payment Rules in Canada
In Canada, the minimum down payment depends on the purchase price of your home:
🏡 5% for homes priced up to $500,000
🏡 5% of the first $500,000 + 10% of the amount above for homes priced between $500,000 and $1,499,999
🏡 20% for homes priced $1.5 million and above
Example:
For a $600,000 home:
5% of $500,000 = $25,000
10% of $100,000 = $10,000
Total down payment = $35,000
2. Use the First-Time Home Buyer Incentives
As a first-time buyer in Ontario, you may qualify for several incentives to help with your down payment:
✅ Home Buyers’ Plan (HBP)
You can withdraw up to $60,000 from your RRSPs tax-free for your down payment. You have 15 years to repay it.
âś… First Home Savings Account (FHSA)
A new program allowing you to save up to $8,000 per year tax-free (up to $40,000 total) towards your first home.
âś… Ontario Land Transfer Tax Rebate
First-time home buyers can receive a rebate of up to $4,000 on Ontario’s Land Transfer Tax.
3. Start Saving Early — Automate It
The earlier you start saving for your down payment, the better. Set up automatic transfers into a high-interest savings account or your FHSA. Treat it like a monthly bill you have to pay.
4. Consider a Gifted Down Payment
Many first-time buyers in Ontario receive help from family. A gift letter (from parents or a close relative) can be used to show the lender that the money is a gift and not a loan.
Make sure:
The funds are in your account at least 15–30 days before closing.
You provide a signed gift letter to your lender.
5. Avoid Common Mistakes
❌ Using your entire savings for the down payment. Keep a buffer for closing costs, moving expenses, and emergencies.
❌ Not getting pre-approved. Know how much you can afford before shopping for a home.
❌ Taking on new debt. Avoid large credit purchases during the mortgage approval process.
6. Work with a Mortgage Professional
Every buyer’s financial situation is different. A mortgage agent or broker can:
Help you maximize your down payment options
Connect you with lenders offering flexible solutions
Help you get pre-approved and lock in competitive rates
Final Thoughts
Saving for your first down payment may feel overwhelming, but with the right strategy and support, it’s absolutely achievable. Take advantage of government programs, stay disciplined with your savings, and surround yourself with the right experts.
You’re not just buying a property — you’re investing in your future.
Need help figuring out your budget or how much you can afford?
✅ Let’s connect and discuss your options. First consultations are always free!