Your Cheat-Sheet to Getting Your First Mortgage in Canada

Buying your first home is a major milestone—and the mortgage process can feel overwhelming with all its rules, numbers, and new terms. This cheat-sheet breaks down exactly what you need to know in 2026: how much you need for a down payment, how lenders decide what you qualify for, which savings programs can help, and the steps to move from saving to getting your keys.

Quick answer: Your minimum down payment depends on the purchase price: 5% on the first $500,000, 10% on the portion up to $1.5 million, and 20% at $1.5 million or more. A pre-approval can help you understand your budget, but final approval also depends on income, debt, credit, the property and lender rules. Buyers putting down less than 20% typically need mortgage default insurance. Eligible first-time buyers can also use the FHSA and Home Buyers’ Plan to save.

First-time buyer eligibility varies by program. For the FHSA, you generally must not have lived in a home owned by you or your spouse or common-law partner in the current year or the previous four calendar years. The Home Buyers’ Plan, land transfer tax rebates and insured-mortgage rules have their own definitions. Check each program’s conditions before relying on first-time buyer status.

Why does this matter? Eligibility may open access to the FHSA, Home Buyers’ Plan, land transfer tax refunds or a 30-year insured amortization. Each program has separate conditions.

The minimum down payment in Canada is based on a sliding scale. Since December 15, 2024, the price cap for insured mortgages is $1.5 million (it was previously $1 million), which makes a big difference for buyers in the GTA.

Illustrative GTA purchase-price examples (not market averages):

• $750,000 condo or townhome in Mississauga or Brampton: $25,000 + $25,000 = $50,000 minimum
• $900,000 home in Vaughan or Richmond Hill: $25,000 + $40,000 = $65,000 minimum
• $1,300,000 detached home in Markham or North York: $25,000 + $80,000 = $105,000 minimum

Before the 2024 change, that $1.3 million home would have required $260,000 down. Keep in mind that a larger down payment reduces your loan size and your insurance costs, so the minimum isn’t always the best option.

If your down payment is less than 20%, your mortgage is generally considered high-ratio and typically needs mortgage default insurance. CMHC, Sagen and Canada Guaranty provide this coverage. It protects the lender, not the borrower, and can allow an eligible buyer to purchase with a smaller down payment.

The premium is usually added to your mortgage balance. In Ontario, provincial sales tax applies to the premium and must be paid in cash at closing, so remember to include it in your budget.

Your down payment is only part of the picture. Lenders also check whether your income can comfortably support the mortgage using three key tests:

1. The Mortgage Stress Test

Under federal rules set by OSFI (the Office of the Superintendent of Financial Institutions), you must qualify at the Minimum Qualifying Rate, which is the higher of your contract rate plus 2% or 5.25%. For example, if you’re offered a 4.29% five-year fixed rate, you must show that you could afford payments at 6.29%. Your actual payment is still based on the 4.29% rate. The stress test only limits how much you can borrow.

2. Gross Debt Service (GDS) Ratio

GDS measures your housing costs as a share of your gross monthly income. Housing costs include your mortgage payment (at the qualifying rate), property taxes, heating, and 50% of condo fees if you’re buying a condo.

3. Total Debt Service (TDS) Ratio

TDS includes everything in GDS plus your other debt payments, such as car loans, student loans, lines of credit and credit card minimums.

Some lenders use stricter limits, especially on conventional mortgages. Tip: Paying down a car loan or credit card before applying can increase your approval amount more than you might expect, since every monthly payment counts against your TDS.

Credit requirements vary by lender and mortgage product; no single score guarantees an approval or the best rate. If your score needs work, pay every bill on time, keep credit card balances low, and avoid opening new credit in the months before you apply. If your credit isn’t perfect, you still have options. Our guide to private vs. traditional mortgages explains how alternative lenders fit in.

You can use the FHSA and HBP together for the same home purchase, which gives a couple a powerful head start. Ontario first-time buyers may also qualify for land transfer tax refunds of up to $4,000 provincially, plus up to $4,475 more in Toronto. See our full breakdown of first-time home buyer programs in Ontario.

Fixed vs. Variable: Choosing Your Mortgage Type

You’ll also choose your amortization, which is the total time to pay off the mortgage. Insured mortgages are generally capped at 25 years, but since December 2024, first-time buyers and buyers of new builds can choose a 30-year amortization for lower monthly payments. Keep in mind that a longer amortization means you pay more interest over time.

Plan for about 1.5% to 4% of the purchase price in closing costs, on top of your down payment:

• Land transfer tax: Ontario charges a provincial tax, and homes in Toronto also pay a municipal land transfer tax
• Legal fees and title insurance
• Home inspection and appraisal fees
• PST on your mortgage insurance premium (Ontario)
• Property tax and utility adjustments, moving costs, and home insurance

Most lenders also want to see that you have enough money set aside to cover closing costs before they approve your mortgage.

• Check your credit and pay down debts to improve your GDS/TDS ratios.
• Build your down payment using your FHSA, the HBP, and your TFSA.
• Get pre-approved. A lender reviews your income, debts and credit, and can hold your rate for up to 120 days while you shop.
• Shop around. Compare offers from banks, credit unions and alternative lenders, or let a mortgage broker compare them for you.
• Make an offer with conditions on financing and inspection.
• Finalize your mortgage. Your lender orders an appraisal, confirms your documents, and issues final approval.
• Close. Your lawyer registers the mortgage and transfers the funds, and you get your keys.

For more on the pre-approval stage, read our First-Time Homebuyer’s Guide to Getting a Mortgage.

In markets like Markham, Vaughan, Richmond Hill, Downtown Toronto, Mississauga, Brampton, Scarborough, North York, and Newmarket, the gap between what one bank offers and the market can be significant. Mortio compares your file across banks, credit unions, alternative, and private lenders with one application. We also help self-employed borrowers, newcomers to Canada, and buyers with bruised credit find a path that fits. Learn more about our Ontario mortgage options or read about the common challenges in getting a mortgage in Canada.

5% on the first $500,000 of the purchase price and 10% on the portion between $500,000 and $1.5 million. Homes priced at $1.5 million or more require 20% down.

It is a federal rule that requires you to qualify at the higher of your contract rate plus 2% or 5.25%. This helps make sure you could still afford your payments if rates rise.

For insured mortgages, lenders generally allow up to 39% of gross income for housing costs (GDS) and up to 44% for all debts combined (TDS). Some lenders apply stricter limits.

Yes. Eligible first-time buyers can use the FHSA (up to $40,000 lifetime) and the Home Buyers’ Plan (up to $60,000 from an RRSP) for the same qualifying home purchase.

Yes. Since December 15, 2024, first-time buyers can choose a 30-year amortization on an insured mortgage.

Many lenders hold your pre-approved rate for up to 120 days, and some offer longer holds.

Getting your first mortgage is much easier when you know the rules before you start. Tell us your household income, how much you’ve saved for a down payment, and the city you want to buy in, and our team will estimate your maximum purchase price and monthly payment. Get pre-approved with Mortio today or contact our team for a free consultation.

• Minimum down payment
• Mortgage qualifying rate and straight switches
• CMHC insurance premiums
• FHSA rules
• Home Buyers’ Plan