Buying a Home With 5% Down in the GTA in 2027: What It Gets You

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 2 November 2026 · 10 min read — Where a 5% down payment still works in the GTA, what it buys by city, and the cash and income you need on top of it in 2027.

This guide is for renters and first-time buyers in Toronto and the GTA who have saved a small down payment and want to know what it can buy in 2027. You will see where an exact 5% down payment still works, how fast the minimum rises above $500,000, and the cash and income you need on top of it.

Can you buy a home with 5% down in the GTA in 2027?

Yes, but only an exact 5% on homes priced at $500,000 or less. Canada’s minimum down payment rule, as set out by the Financial Consumer Agency of Canada, works in steps:

• $500,000 or less: 5% of the price.
• Over $500,000 and under $1.5 million: 5% of the first $500,000, plus 10% of the part above $500,000.
• $1.5 million or more: 20% of the price.

So “5% down” is really a starting point. On a $700,000 townhouse the minimum is $45,000, which is 6.4% of the price. On a $1 million detached house it is $75,000, or 7.5%. Nothing announced as of November 2026 changes these steps for 2027.

Any purchase with less than 20% down needs mortgage default insurance, and CMHC says the price must be below $1.5 million for that insurance. Since 15 December 2024, first-time buyers and buyers of newly built homes can get a 30-year amortization on an insured mortgage, according to the Department of Finance. Everyone else with less than 20% down is held to 25 years.

What does 5% down actually buy in the GTA right now?

In the GTA, an exact 5% down payment mostly buys a condo apartment. TRREB’s October 2026 Market Watch shows 5,952 of the 52,694 sales reported through its MLS System from January to October 2026 were under $500,000. That is about 11% of all sales. Among condo apartments, 5,213 of 13,704 sales were under $500,000, or about 38%.

Here is where the median sale price sat below or near that line, and what the minimum down payment would be at that median.

Source: TRREB MLS data via REALM, January–October 2026 (median sold prices, city or Toronto district level, not neighbourhood figures). Down payments are my calculations using the FCAC minimum down payment rules.

Two things stand out. First, a true 5% purchase in the GTA is a condo apartment in most places. Second, freehold homes are within reach of a small down payment in Durham and Brampton, but the minimum is closer to 6% to 7.5% of the price. For more on the cheapest pockets, see my list of the most affordable Toronto areas to buy a condo and the top GTA cities for first-time buyers.

How much cash do you need on top of a 5% down payment?

More than most people expect. The down payment is only the first cheque. Three other costs come with a small down payment:

• The CMHC premium. At 5% down, CMHC charges 4.00% of the loan. CMHC adds a 0.20% surcharge when the amortization is longer than 25 years, so a first-time buyer taking 30 years pays 4.20%. The premium is added to your mortgage.
• Sales tax on that premium. CMHC says premiums in Ontario are subject to provincial sales tax, and that tax cannot be added to the loan. At 8%, it is paid in cash on closing.
• Land transfer tax. Ontario refunds up to $4,000 to first-time buyers who have never owned a home anywhere. Inside Toronto you also pay the municipal tax, with a first-time buyer rebate of up to $4,475.

Source: my calculations using CMHC premium rates and the 0.20% surcharge for amortizations over 25 years, Ontario land transfer tax rates and the first-time buyer refund (ontario.ca), as of November 2026. Prices match the Brampton condo apartment, Brampton condo townhouse and Oshawa detached medians above.

Budget a few thousand dollars more for legal fees, title insurance, adjustments and moving. My full list of buyer closing costs in Ontario for 2027 walks through each one.

What will the monthly payment be with 5% down?

The payment depends on your rate, which changes daily, so treat this as an example only. At an assumed 4.5% rate over 30 years, the $410,808 mortgage on a $415,000 condo works out to about $2,071 a month. The $710,644 mortgage on a $730,000 house works out to about $3,583 a month. Property tax, heating and condo fees come on top.

Rates moved up this fall. The Bank of Canada raised its policy rate to 2.50% on 28 October 2026, its first increase in more than three years, and the big banks raised prime to 4.70%. Its next decision is on 9 December 2026. For what forecasters expect, read will mortgage rates go down in 2027.

How much income do you need to buy with 5% down?

Your lender has to qualify you at a higher rate than you will pay. For insured mortgages, CMHC lists the qualifying rate as the greater of your contract rate plus two points or 5.25%. Your housing costs then have to fit two limits: 39% of gross income for the mortgage payment, property tax, heat and half of any condo fee, and 44% once your other debts are added.

Using the same assumed 4.5% rate, the stress-test payment on the $415,000 condo is about $2,573 a month. That payment alone uses 39% of roughly $79,000 a year in gross income, before property tax, heat and condo fees are added. In practice, a single buyer needs a fair bit more than that. My guide on how much home you can afford in the GTA shows the full ratio math.

Is 5% down a good idea when prices are falling?

It can be, but the risk is real. Prices are lower than a year ago almost everywhere in the GTA. In the REALM data, the Brampton condo apartment median fell 12.6% from the same period of 2025, and the Oshawa condo apartment median fell 14.3%. TRREB reported the October 2026 average GTA price at $1,024,108, down 2.7% year over year, with the benchmark price down 4.3%.

Lower prices help a buyer get in. But with only 5% down, and a premium of about 4% added to the loan, you start with almost no equity. If prices slip again, you could owe more than the home would sell for after selling costs.

Can you buy a new build or pre-construction with 5% down?

The mortgage rules are the same: the 5% and 10% steps apply, and a newly built home also qualifies for a 30-year insured amortization. The difference is the deposit. Builders set their own deposit schedules, and they are often larger than the mortgage minimum and paid in stages long before closing. Read the schedule before you sign.

New homes can also come with large tax rebates. CRA’s First-Time Home Buyers’ GST/HST rebate removes up to $50,000 of the federal tax on a new home up to $1 million for eligible buyers, and Ontario’s enhanced rebate covers the 8% provincial part for agreements signed from 1 April 2026 to 31 March 2027. My guide to the HST and GST rebates on new condos explains who qualifies.

Where can the 5% come from?

Lenders accept savings, money from selling a property, and a non-repayable gift from a relative, according to CMHC. Two federal accounts can also fund it:

• First Home Savings Account (FHSA): up to $8,000 a year and $40,000 in total, deductible going in and tax-free coming out for a qualifying home.
• RRSP Home Buyers’ Plan: up to $60,000 per person, repaid over 15 years.

CMHC also allows a borrowed down payment, such as an unsecured personal loan, on homes with one or two units, if at least one borrower has a credit score of 600 or more. The premium rises to 4.50%, and the loan payment counts against your debt limits.

Is it better to wait and save 10% or 20%?

Waiting saves premium, but it costs time. Here is a $500,000 purchase with a 25-year amortization:

• 5% down ($25,000): CMHC premium of $19,000 at 4.00%.
• 10% down ($50,000): premium of $13,950 at 3.10%.
• 20% down ($100,000): no premium at all.

Going from 5% to 10% saves about $5,050 in premium plus the tax on it. For many renters in Toronto, that takes a year or more of saving, while rent keeps going out. The right answer depends on your rent, your savings rate and how long you plan to stay.

What to do next

1. Work out your exact minimum down payment at your target price using the 5% and 10% steps, then add the premium tax and land transfer tax.
2. Get a mortgage pre-approval so you know your real stress-test limit at today’s rates.
3. Open an FHSA before 31 December 2026 if you have not, so you have more room in 2027.
4. Compare medians by city and home type in the table above to find where your budget buys a home you will want to keep.
5. Book a call with me to map your cash to close before you start writing offers.

Frequently asked questions

Sources

• Financial Consumer Agency of Canada: Saving for a down payment (minimum down payment table)
• CMHC: Mortgage loan insurance costs (premium rates, provincial sales tax)
• CMHC: Premium information for homeowner loans (0.20% surcharge over 25 years)
• CMHC: CMHC Purchase (price cap, down payment sources, GDS/TDS)
• Department of Finance Canada: Boldest mortgage reforms in decades ($1.5M cap, 30-year amortization)
• Ontario: Land transfer tax refunds for first-time homebuyers
• TRREB Market Watch, October 2026
• CMHC: Calculating GDS and TDS (39%/44% limits and qualifying rate)

Related reading

• Biggest Condo Developers in Toronto: Track Records Buyers Should Check
• Is It a Good Idea to Buy a Condo in Toronto in 2027?
• Buying a House in Ontario on a Work Permit (2027): What the Foreign Buyer Ban Allows
• Can You Buy a House With No Down Payment in Ontario?