Question 1

How much down payment do I need to buy a home in Ontario?

Accepted Answer

5% on the first $500,000, 10% on the portion between $500,000 and $1.5M, and 20% on any portion above $1.5M. Insured mortgages (less than 20% down) also require CMHC/Sagen/Canada Guaranty premium.

Question 2

How long does a mortgage pre-approval last?

Accepted Answer

Rate holds run 90–120 days depending on the lender. If rates drop before you close, most lenders honour the lower rate at commitment (a 'float-down').

Question 3

Do first-time home buyers get any incentives in Canada?

Accepted Answer

First-Home Savings Account (FHSA) up to $8,000/year and $40,000 lifetime tax-deductible, RRSP Home Buyers' Plan up to $60,000 per person, and Ontario's Land Transfer Tax rebate up to $4,000 for first-time buyers in the province.

Question 4

What credit score do I need to qualify?

Accepted Answer

660+ is comfortable for A-lenders. 600–660 usually still works with prime lenders on a strong file. Below 600 typically moves the file to alternative or B-lending with a slightly higher rate.

Question 5

What are closing costs in Ontario?

Accepted Answer

Budget 1.5–4% of the purchase price: land transfer tax (biggest single item in the GTA), legal fees ~$1,500–$2,500, title insurance ~$300–$500, home inspection ~$500, plus adjustments.

Question 6

Can I buy with a co-signer or gifted down payment?

Accepted Answer

Yes — co-signers strengthen income qualification, and gifted down payments from immediate family are standard. Lenders need a gift letter and 90 days of history for the gifted funds.

Question 7

Can I get a mortgage for a new-construction home?

Accepted Answer

Yes. Purchase-plus-improvements, new-build assignments, and pre-construction with occupancy periods are all standard files. Timing the rate hold to the actual closing (not the interim occupancy date) is the key structural point.

Question 8

Is it worth using a broker vs going straight to my bank?

Accepted Answer

A broker shops 50+ lenders in one application (bank shops one). On a $600,000 mortgage a 0.20% rate difference is roughly $18,000 in interest over the term. Broker services are typically paid by the lender at no cost to you.

Question 9

What's the difference between pre-qualification and pre-approval?

Accepted Answer

Pre-qualification is an estimate based on stated numbers. Pre-approval is a full underwritten review with credit pull and income verification — this is what protects you when you write an offer.

Question 10

How long from offer to closing?

Accepted Answer

Standard purchase closings run 30–60 days. Quick closes (2–3 weeks) are possible with prepared documents; extended closings up to 120 days let you lock a rate now for a later close.

Question 11

Can I use a mortgage for an investment property?

Accepted Answer

Yes. Minimum 20% down for rental purchases, with rental income partially added to your qualifying income (typically 50–80% depending on lender and property type).

Question 12

What is the mortgage stress test?

Accepted Answer

Federal rule that qualifies you at the greater of 5.25% or your contract rate + 2%. It applies to insured and uninsured mortgages at federally regulated lenders. Credit unions and some alternative lenders are not bound by it.

Question 13

What is the minimum credit score for a mortgage in Canada?

Accepted Answer

There is no legislated minimum, but 660+ opens all A-lender programs. 600–660 typically still qualifies with prime lenders on a strong file. 500–600 usually routes to alternative or B-lending. Below 500 is private-lender territory.

Question 14

How much mortgage can I afford on my income?

Accepted Answer

As a rule of thumb, most Ontario buyers qualify for 4.0–4.5× gross household income at current stress-tested rates. A $150,000 household typically qualifies for $600K–$675K in mortgage debt, plus down payment.

Question 15

What's the difference between insured, insurable, and uninsured mortgages?

Accepted Answer

Insured: less than 20% down, CMHC/Sagen/Canada Guaranty premium added, sharpest rates. Insurable: 20%+ down but the lender back-insures on the wholesale side, still sharp rates. Uninsured: refinances and $1M+ purchases, typically 0.10–0.25% higher.

Question 16

Should I choose fixed or variable rate?

Accepted Answer

Fixed protects your payment for the term. Variable moves with prime and historically outperforms fixed over 25+ years — but requires cash-flow flexibility. In 2026's rate environment, most brokers recommend a shorter fixed (2–3 years) unless the variable discount widens meaningfully.

Question 17

Can I break my mortgage early?

Accepted Answer

Yes, but expect a penalty: 3 months' interest on variable, greater of 3 months' interest or IRD on fixed. Big-Five IRD calculations are punitive; monoline and credit-union IRDs are usually much cheaper.

Question 18

What is the First Home Savings Account (FHSA)?

Accepted Answer

A registered account for first-time buyers: contribute up to $8,000/year and $40,000 lifetime, deductible from income like an RRSP, and withdraw tax-free like a TFSA when buying a first home. Can be combined with the RRSP Home Buyers' Plan.

Question 19

Do I need a real-estate lawyer to buy a home in Ontario?

Accepted Answer

Yes — Ontario requires a lawyer to close a property purchase. They review the agreement, register the title, discharge existing mortgages, coordinate funds, and file the land transfer tax. Budget $1,500–$2,500 all-in.

Question 20

What is the Ontario land transfer tax?

Accepted Answer

A tiered tax on the purchase price: 0.5% to $55K, 1% to $250K, 1.5% to $400K, 2% to $2M, 2.5% above $2M. Toronto adds a matching municipal LTT. First-time buyers receive up to $4,000 provincial and $4,475 Toronto rebate.

Question 21

How does the mortgage stress test affect my purchase?

Accepted Answer

You must qualify at the greater of 5.25% or your contract rate + 2%. On a 4.79% approval, you actually qualify at 6.79%, which reduces your maximum by roughly 15–20% versus contract-rate qualification.

Question 22

Can non-residents buy a home in Ontario?

Accepted Answer

The federal Prohibition on the Purchase of Residential Property by Non-Canadians Act runs through January 1, 2027. Exemptions exist for permanent residents, workers with 3+ years in Canada, and international students meeting criteria.

	Mortgage Broker	Your Bank	Online-Only Lender
Lenders shopped	50+	1	1
Typical rate spread	Sharpest	+0.15–0.40%	Competitive but rigid
Self-employed programs	Full access	Limited	Usually declined
Bruised-credit options	Yes (A, B, private)	A-lender only	No
Cost to you	$0 (lender-paid)	$0	$0
Advice conflict	None — independent	Only their products	Only their products

Home Purchase Mortgage

Get Pre-Qualified

Who a home purchase mortgage is — and isn't — for

Myths vs. reality

Broker vs. Bank vs. Online Lender

What working together looks like

Discovery call (15 min)

Document collection

Pre-approval & rate hold

Offer support

Closing

Common questions

From the Learning Centre

Understanding Home Equity

Jay Klair

Other services

Mortgage Refinance

Reverse Mortgage

Second Mortgage

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