Saving the down payment
A First Home Savings Account (FHSA) lets you put in up to $8,000 a year, to a lifetime limit of $40,000. The Home Buyers' Plan lets you withdraw up to $60,000 from your RRSP toward a first home and repay it over time.
The minimum down payment is 5% of the first $500,000 of the price and 10% of the part above that. On a $400,000 home that is $20,000; on a $550,000 home, $30,000.
What a first home costs up front
With less than 20% down, your mortgage is insured; the premium (4.00% of the loan at 5% down) is added to the mortgage, but Ontario's 8% sales tax on the premium is paid in cash at closing. Ontario's land transfer tax is due at closing too, less the first-time refund.
| Price | Minimum down | Land transfer tax after first-time refund | 8% tax on insurance premium |
|---|---|---|---|
| $350,000 | $17,500 | $0 (tax $3,725, refunded) | $1,064 |
| $450,000 | $22,500 | $1,475 (tax $5,475) | $1,368 |
| $550,000 | $30,000 | $3,475 (tax $7,475) | $1,664 |
The land transfer tax refund
Ontario refunds up to $4,000 of the land transfer tax to first-time buyers, which covers the whole tax on a home up to about $368,000. You must be at least 18, a Canadian citizen or permanent resident, never have owned a home anywhere in the world, and move in within nine months; if your spouse owned a home while you were together, you do not qualify. It applies to new and resale homes, and your lawyer usually claims it at registration. Try the calculator.
Qualifying for the mortgage
Lenders qualify you at the greater of your contract rate plus 2% or 5.25%. For an insured mortgage, housing costs (mortgage, property tax, heating and half of any condo fee) should stay within 39% of gross income, and all debts within 44%. First-time buyers can take a 30-year amortization on an insured mortgage, which lowers the payment, for a 0.20% higher premium. The affordability calculator runs these tests for you.
Buying a new build
Federal law now gives first-time buyers a GST rebate on newly built homes: the full GST on homes up to $1 million, reduced between $1 million and $1.5 million, worth up to $50,000, for agreements signed from March 20, 2025 and before 2031. Ontario offers a rebate of up to $80,000 of the provincial part of the HST for first-time buyers of new homes. Programs for new homes change often, so confirm the current rules with your lawyer and the Canada Revenue Agency before you sign with a builder.
Where first-time buyers look
In Elgin, St. Thomas usually has the most choice at lower prices, and Tillsonburg, just over the Oxford line, has a good number too. Condos are scarce everywhere outside London; St. Thomas, Port Stanley and Tillsonburg have the most. Browse homes under $500K.
Before you move ahead
- Open an FHSA as early as you can
- Check your RRSP for the Home Buyers' Plan
- Get pre-approved (and ask about a 30-year insured amortization)
- Budget the land transfer tax, less the refund
- Budget 8% tax on any insurance premium, due at closing
- Keep money for legal fees, title insurance and an inspection
General information for Ontario buyers and sellers, current as of September 26, 2026. It is not legal, tax or financial advice. Rules and rates change, so confirm the details for your own purchase or sale with your lawyer, lender or accountant.
Sources
- Ontario: land transfer tax refunds for first-time homebuyers
- Ontario: calculating land transfer tax
- FCAC: down payment
- FCAC: preparing to get a mortgage
- CMHC: mortgage loan insurance cost
- CMHC: Home Start (30-year amortization)
- CRA: contributing to your FHSA
- CRA: Home Buyers' Plan
- Department of Finance: first-time buyer GST relief receives royal assent
- CRA: first-time home buyers' GST/HST rebate