Buying a Home
First home, next home or an investment property — the process is the same shape: understand your real budget, get properly pre-approved, then shop with confidence instead of hope.
The short answer
In Canada the minimum down payment is 5% on the first $500,000, 10% on the portion from $500,000 to $1.5 million, and 20% at $1.5 million and above. Buyers qualify at the stress-test rate — the greater of their contract rate plus 2% or 5.25% — and should budget roughly 1.5% of the purchase price for closing costs.
What a real pre-approval includes
- A full review of income documents, not just a stated number.
- A credit check and a look at how your existing debts affect your ratios.
- A rate hold, typically 90–120 days.
- A clear maximum, plus a comfortable number — they're rarely the same.
Costs beyond the down payment
- Land transfer tax (with an extra municipal layer in Toronto, and rebates for eligible first-time buyers).
- Legal fees and disbursements.
- Home inspection and, for some properties, an appraisal.
- Title insurance, moving costs and initial utility set-up.
- Default insurance premium if your down payment is under 20% — added to the mortgage, not paid up front.
Common questions
How much mortgage can I afford in Canada?
It depends on income, existing debts, the property's taxes and fees, and the stress-test rate. Lenders generally want housing costs under about 39% of gross income and total debts under about 44%. The affordability calculator on this site models both a comfortable and a maximum range.
Do I need 20% down?
No. Below 20% your mortgage is insured and you pay a premium that's added to the mortgage. Insured mortgages often carry lower rates than uninsured ones, so more down isn't automatically cheaper overall.
Your numbers
Estimated affordability
$660,739 – $734,781
- Income used
- $150,000
- Estimated mortgage (comfortable)
- $580,739
- Estimated mortgage (lender max)
- $654,781
- Estimated monthly payment
- $3,656.87
- Stress-tested payment at 6.59%
- $4,421.66
- Minimum down payment at top of range
- $48,478
Assumptions
- Comfortable range uses GDS 35% / TDS 42%; maximum uses GDS 39% / TDS 44%.
- Qualification is run at the stress-test rate, not your contract rate.
- Amortization is 25 years.
This is an illustration, not a mortgage approval or pre-approval. Real qualification depends on credit, documents, property and lender guidelines.
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