FIRST-TIME HOME BUYERS-COST AND BENEFITS

FIRST-TIME HOME BUYERS-Cost Of Owning A Home

Buying your first home is one of the most exciting decisions you'll ever make. But in Ontario, the purchase price is only part of what you'll need to budget for. Closing costs — the fees and taxes due on the day you take ownership — can add anywhere from 1.5% to 4% of the purchase price on top of your down payment.

The good news: Ontario has more first-time buyer programs and tax rebates available right now than at any previous time. If you know about them, you can save tens of thousands of dollars. Here's a complete, up-to-date breakdown.

Appraisal & Home Inspection

Most lenders require an independent appraisal before approving your mortgage — typically $250 to $800. A home inspection, which I strongly recommend making a condition of your offer, generally runs $300 to $500. These are non-negotiable investments in knowing exactly what you're buying.

Deposit

When your offer is accepted, you'll typically provide a deposit of around 5% of the purchase price within 24 hours. This is applied toward your down payment at closing — it's not an extra cost, but it does need to be liquid and immediately accessible.

Down Payment — Know the Tiered Rules

The minimum down payment in Ontario isn't a flat percentage. It's tiered:

• 5% on the first $500,000 of the purchase price
• 10% on any portion between $500,000 and $1.5 million
• 20% required for homes above $1.5 million (CMHC insurance is unavailable above this threshold)

So on an $800,000 home, your minimum down payment is $55,000 — not $40,000. Knowing this early prevents a painful surprise.

Mortgage Loan Insurance — Including Ontario's Hidden PST

If your down payment is less than 20%, mortgage default insurance (commonly called CMHC insurance) is mandatory. The 2026 premium rates are 4.00% for a 5% down payment, 3.10% for 10% down, and 2.80% for 15% down. The premium is added to your mortgage, so you don't need extra cash for it upfront.

However, Ontario charges an 8% provincial sales tax (RST) on your CMHC premium — and this portion cannot be added to your mortgage. It must be paid in cash on closing day. On a $22,800 premium, that's $1,824 due at closing. Budget for it.

First-time buyers and purchasers of new builds can now opt for a 30-year amortization (introduced December 2024), which reduces monthly payments. This comes with a 0.20% surcharge on your CMHC premium.

Legal Fees & Title Insurance

In Ontario, a licensed lawyer is legally required to complete your purchase — unlike Quebec, where a notary can handle it. Legal fees typically range from $1,000 to $3,000. Your lawyer will handle the title search, review your Agreement of Purchase and Sale, and register the transfer of ownership.

Title insurance — which protects against fraud, zoning issues, and ownership disputes — is typically arranged through your lawyer and is well worth adding, usually at a modest additional cost.

Survey / Real Property Report

Some lenders request an updated survey (real property report) confirming the property boundaries. This costs $1,000–$2,000 in Ontario. In many cases, a title insurance policy can serve as an alternative — your lawyer will advise you.

HST on New Builds — Major 2026 Rebates

If you're buying a newly built home in Ontario, 13% HST applies. But there are now significant rebates available for first-time buyers:

• The federal First-Time Home Buyers' GST/HST Rebate eliminates the 5% federal portion of HST on new homes up to $1 million — a saving of up to $50,000.
• Ontario's provincial rebate mirrors this, adding up to $80,000 in provincial HST relief.
• Combined, eligible first-time buyers can save up to $130,000 in HST on new homes up to $1 million.

To qualify for the federal rebate, your purchase agreement must have been signed on or after March 20, 2025, and you must not have owned a home in the current or previous four calendar years. Note: confirm the current status of Ontario's expanded rebate with your lawyer, as legislative passage was ongoing in mid-2026.

Land Transfer Tax — and Your Rebate

Land Transfer Tax (LTT) is one of Ontario's largest closing costs. It's calculated on a tiered, marginal basis — but first-time buyers receive a provincial rebate of up to $4,000. For homes priced at $368,000 or less, the rebate covers the full tax. Above that, you receive $4,000 off your LTT bill.

If you're buying in the City of Toronto, you'll also pay the Municipal Land Transfer Tax — a second tax on top of the provincial one. However, first-time Toronto buyers receive an additional municipal rebate of up to $4,475, bringing the combined maximum rebate to $8,475.

Your lawyer claims this rebate at registration — just make sure they know you're a first-time buyer.

Three Programs You Might Be Missing

Beyond the rebates above, three federal programs can meaningfully reduce your costs:

• First Home Savings Account (FHSA): Contribute up to $8,000/year ($40,000 lifetime). Tax-deductible going in, tax-free coming out for your home purchase.
• Home Buyers' Plan: Withdraw up to $60,000 from your RRSP tax-free toward your purchase, with 15 years to repay.
• Home Buyers' Amount Tax Credit: Claim a $10,000 tax credit in the year of purchase, worth approximately $1,450 back at tax time.

These programs can be combined — and they reward buyers who start planning early.

The Bottom Line

Budget 1.5% to 4% of your purchase price in closing costs, beyond your down payment. On a $700,000 home, that's $10,500 to $28,000. But with the right guidance, rebates and programs can significantly offset those costs.

If you're ready to take the next step, I'm here to walk you through the entire process. Click here to get in touch.