First-Time Home Buyer Mortgage Guide: Ontario 2024
Buying your first home in Ontario is one of the most significant financial decisions you will ever make. This guide walks you through everything you need to know — from government incentives to the mortgage approval process — so you can enter the market with confidence.
First-Time Home Buyer Incentives in Ontario (2024)
1. Home Buyers’ Plan (RRSP Withdrawal)
Withdraw up to $35,000 per person ($70,000 per couple) from your RRSP tax-free to use as a down payment. Repay over 15 years through RRSP contributions.
2. First Home Savings Account (FHSA)
Contribute up to $8,000/year (lifetime max $40,000) to your FHSA. Contributions are tax-deductible and withdrawals for a qualifying home purchase are completely tax-free — with no repayment required. This is the most powerful new tool for first-time buyers.
3. Ontario Land Transfer Tax First-Time Buyer Rebate
First-time buyers in Ontario receive a rebate of up to $4,000 on the provincial land transfer tax.
4. Toronto Land Transfer Tax First-Time Buyer Rebate
Buyers in the City of Toronto receive an additional rebate of up to $4,475 on Toronto’s municipal land transfer tax.
5. GST/HST New Housing Rebate
If you purchase a new construction home, you may qualify for a partial rebate of the GST/HST paid on the purchase. The rebate is up to 36% of GST paid on homes priced below $350,000, with a sliding scale up to $450,000.
6. First-Time Home Buyers’ Tax Credit (HBTC)
Claim a non-refundable federal tax credit of up to $1,500 on your income tax return in the year you purchase your first home.
Minimum Down Payment for First-Time Buyers in Ontario
| Purchase Price | Minimum Down Payment | CMHC Insurance Premium |
|---|---|---|
| $500,000 or less | 5% | 4.00% of mortgage |
| $500,001 – $999,999 | 5% on first $500K + 10% on remainder | 3.10%–4.00% |
| $1,000,000+ | 20% minimum | No CMHC available |
The First-Time Buyer Mortgage Process: Step by Step
Step 1: Know Your Budget
Before searching for a home, calculate your monthly carrying costs using the mortgage stress test rate (your contract rate + 2%, or 5.25% — whichever is higher). Your total housing costs (mortgage + property tax + heating) should not exceed 32% of your gross income (GDS ratio).
Step 2: Get Pre-Approved
A mortgage pre-approval locks in your rate for 90–130 days and shows sellers you are a serious buyer. Contact Saif Abdulah to start your pre-approval today.
Step 3: Hire a Real Estate Agent
A buyer’s agent costs you nothing — they are paid by the seller. Choose an agent who specializes in your target market and price range.
Step 4: Shop for Your Home
Visit multiple properties. Consider school districts, transit, commute time, and neighbourhood amenities alongside price.
Step 5: Make an Offer with a Financing Condition
Always include a financing condition (5–10 business days) to allow time for full mortgage approval and a home inspection.
Step 6: Complete Your Mortgage and Close
Once your offer is accepted, your mortgage agent submits for full approval. Your lawyer completes the title transfer on closing day.
First-Time Buyer Mistakes to Avoid
- Skipping the pre-approval: Searching without knowing your budget wastes time and can lead to disappointment
- Forgetting closing costs: Budget 1.5%–4% of purchase price for land transfer tax, legal fees, and home inspection
- Changing jobs before closing: Income changes during underwriting can jeopardize your approval
- Taking on new debt before closing: New car loans or credit card balances can change your TDS ratio and trigger a re-evaluation
- Going directly to your bank only: Banks offer only their own products; a mortgage agent shops 50+ lenders for you
First-Time Buyer Programs: Federal vs. Ontario Summary
| Program | Benefit | Level |
|---|---|---|
| Home Buyers’ Plan (RRSP) | $35,000 tax-free RRSP withdrawal | Federal |
| First Home Savings Account | $40,000 lifetime tax-free savings | Federal |
| Home Buyers’ Tax Credit | $1,500 tax credit | Federal |
| Ontario LTT Rebate | Up to $4,000 | Provincial |
| Toronto LTT Rebate | Up to $4,475 | Municipal |
Frequently Asked Questions: First-Time Home Buyers in Ontario
What is the definition of a first-time home buyer in Ontario?
You have never owned a home anywhere in the world, and (for the RRSP HBP) you have not lived in a home you or your spouse owned as a principal residence in the past 4 calendar years.
Can I use both the RRSP HBP and the FHSA for the same purchase?
Yes. Using both is the optimal strategy. You can withdraw up to $35,000 from your RRSP (HBP) and up to $40,000 from your FHSA — a combined $75,000 per person ($150,000 per couple).
Do I need a mortgage agent as a first-time buyer?
You are not required to use one, but most first-time buyers benefit significantly from a mortgage agent’s market access, education, and advocacy. The service is free — lenders pay the agent’s commission.
What credit score do I need as a first-time buyer in Canada?
Most A lenders require a minimum 620 credit score for an insured mortgage. Scores of 680+ qualify for the best rates and most lender programs.
Ready to Buy Your First Home in Ontario?
Saif Abdulah is a Licensed Mortgage Agent Level 2 with 8Twelve Mortgage. He specializes in helping first-time buyers navigate every incentive, program, and mortgage option available in Ontario.
