Your complete roadmap to buying your first home in Toronto — FHSA, LTT rebates, pre-approval, and closing day.
Buying your first home in Toronto is one of the most significant financial decisions you'll make. This comprehensive guide walks you through every step of the process — from building your down payment to getting the keys. Toronto's double land transfer tax (provincial + municipal MLTT) makes understanding your full cost picture especially important.
Before looking at listings, get a clear picture of your finances. Review your credit score (700+ is ideal for best mortgage rates), calculate your gross household income, list all debts (car loans, student loans, lines of credit), and estimate how much you can save monthly. Mortgage lenders use two ratios: Gross Debt Service (GDS) — housing costs should not exceed 32–39% of gross income — and Total Debt Service (TDS) — all debt payments should not exceed 44% of gross income.
The First Home Savings Account (FHSA) is the most powerful tool for first-time buyers. Contributions are tax-deductible (like an RRSP), withdrawals for a qualifying home purchase are tax-free (like a TFSA), and unused room carries forward. Contribute up to $8,000/year with a $40,000 lifetime maximum. Open your FHSA immediately — you can't claim unused contribution room from years you didn't have an account open.
In addition to the FHSA, first-time buyers can withdraw up to $60,000 per person ($120,000 per couple) from RRSPs under the Home Buyers' Plan (HBP). The withdrawal must be repaid over 15 years — 1/15 each year, or the unpaid amount is added to your taxable income. RRSP contributions must have been in the account for at least 90 days before withdrawal.
Contact at least 3 lenders (your bank, a credit union, and a mortgage broker). Pre-approval locks in a rate for 90–120 days and gives you a firm budget. Provide: proof of income (pay stubs, T4s, NOAs), employment letter, bank statements (3 months), down payment source documentation, and ID. A pre-approval is not a guarantee — a formal approval comes after a property is selected.
Toronto buyers pay BOTH Ontario's provincial LTT AND Toronto's Municipal Land Transfer Tax (MLTT). First-time buyers receive rebates on both: up to $4,000 provincial and up to $4,475 MLTT. Use our calculator below to see your exact amounts. Factor this into your total budget — on a $700,000 purchase, LTT costs approximately $8,900 (after FTB rebates).
A buyer's agent in Ontario is typically compensated from the seller's commission — meaning their services are often free to you as a buyer. Choose an agent with experience in your target neighbourhoods, strong recent transaction history, and good communication. Sign a Buyer Representation Agreement and ensure you understand the terms.
When you find a home, your agent will prepare an Agreement of Purchase and Sale. Key conditions to include: Condition on Financing (3–5 business days for mortgage approval), Condition on Home Inspection, and potentially a Status Certificate Review for condos. In competitive markets, be prepared to act quickly — some homes in desirable areas sell unconditionally within 24–48 hours of listing.
On closing day (typically 30–90 days after offer acceptance), your lawyer will handle the title search, mortgage registration, and transfer of funds. You'll pay your land transfer tax(es), legal fees ($1,500–$2,500), title insurance, and any adjustments for prepaid taxes or utilities. After registering the deed, you receive the keys.
| Program | Maximum Rebate | Eligibility |
|---|---|---|
| Ontario Provincial LTT Rebate | $4,000 | First-time buyer, Canadian citizen or PR, primary residence |
| Toronto MLTT Rebate | $4,475 | Same as above, property must be in City of Toronto |
| FHSA Lifetime Contribution | $40,000 (+ tax deduction) | Canadian resident, first-time buyer, age 18+ |
| RRSP Home Buyers' Plan | $60,000/person | First-time buyer, RRSP funds held 90+ days |
Estimates both Ontario provincial LTT and Toronto MLTT with FTB rebates.
If your down payment is less than 20% of the purchase price, you must pay CMHC mortgage insurance. The premium is added to your mortgage principal and amortized over your mortgage term.
| Down Payment | CMHC Premium |
|---|---|
| 5% (minimum for homes under $500K) | 4.00% of mortgage |
| 5–9.99% | 4.00% of mortgage |
| 10–14.99% | 3.10% of mortgage |
| 15–19.99% | 2.80% of mortgage |
| 20%+ (conventional) | $0 |
KOHO's high-interest savings account earns competitive returns with no monthly fees — perfect for building your down payment while you prepare to buy.
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