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Get My Free Estimate →The deposit and the down payment are different things, and the deposit is the one that catches people out — it is a certified cheque due within about 24 hours of an accepted offer, so the money has to be liquid before you start looking. Minimum down payment is 5 per cent up to $500,000, 10 per cent on the portion from $500,000 to $1.5 million, and 20 per cent at $1.5 million and above. Uninsured borrowers qualify at the greater of the contract rate plus two points or 5.25 per cent. Since 15 December 2024, 30-year amortizations are available to all first-time buyers and the insured price cap is $1.5 million. Closing costs, including land transfer tax twice in Toronto, are cash on top. And do not give notice on your tenancy until the deal is firm.
The gap between renting and owning is not really about the down payment. It is about a sequence of things that have to happen in a particular order, several of which take longer than people expect, and one of which — the deposit — has to be liquid on a day you do not control. Here is the sequence.
The two numbers people confuse
A deposit is not a down payment. The deposit is the cheque that accompanies your offer, usually within 24 hours of acceptance, and it is a certified cheque or a bank draft. The down payment is the total equity you put in, of which the deposit forms part, and the rest of it is not needed until closing. People save diligently toward a down payment and then find they cannot produce a deposit on a Tuesday afternoon because the money is in a locked-in account.
Minimum down payment
| Purchase price | Minimum down payment |
|---|---|
| $500,000 or less | 5 per cent of the purchase price |
| $500,000 to $1.5 million | 5 per cent of the first $500,000, plus 10 per cent of the portion above $500,000 |
| $1.5 million or more | 20 per cent |
Below 20 per cent you will typically need mortgage loan insurance. Two rules that came into force on 15 December 2024 matter for first-time buyers: the insured mortgage price cap rose to $1.5 million, and 30-year amortizations became available to all first-time buyers and to all buyers of new builds.
On a $700,000 purchase the minimum is $45,000 — five per cent of the first $500,000 plus ten per cent of the next $200,000. That is the floor, not the target.
Qualifying: the stress test
For an uninsured mortgage, OSFI’s minimum qualifying rate is the greater of the contract rate plus two percentage points, or 5.25 per cent. You are approved on a payment you are not actually making. It is deliberately conservative and it is the single largest constraint on what a first-time buyer can borrow.
The sequence, and how long each step takes
| Step | Typical timing | Why it takes that long |
|---|---|---|
| Get your credit report and fix errors | Start 6–12 months out | Disputes take weeks to resolve and a correction has to work through before a lender pulls the file. |
| Assemble income documentation | 2–4 weeks | Self-employed and commission income generally needs two years of filed returns and notices of assessment. |
| Get a real pre-approval, not a rate hold | 1–2 weeks | A pre-approval with documents reviewed is a different thing from an online rate quote. |
| Move the deposit money somewhere liquid | Before you start offering | A certified cheque or bank draft cannot be produced from a locked-in or notice account overnight. |
| Confirm gifted funds and their paper trail | Weeks, not days | Gifted down payments need a gift letter and lenders trace the funds. Start early. |
| Offer accepted to firm | Days | Financing and inspection conditions run on a short clock. |
| Firm to closing | 30–90 days typically | This is when the balance of the down payment and the closing costs are needed. |
Closing costs, which are not the down payment
In Toronto these are substantial and they are cash on closing day, on top of the down payment:
- Land transfer tax, twice. Ontario Land Transfer Tax and the Toronto Municipal Land Transfer Tax, both on the same consideration. First-time buyers can claim up to $4,000 from Ontario and up to $4,475 from the City, each within 18 months.
- Legal fees and disbursements.
- Title insurance.
- Status certificate on a condominium, and your lawyer’s review of it.
- Adjustments — prepaid property tax, maintenance fees and utilities reimbursed to the seller.
The current bracket table is on a separate page. Work out both taxes before you decide what you can offer, not afterwards.
What renting well does for the purchase
Three practical things, none of which requires a decision to buy:
Build a credit file that a lender can read. Rent payments do not automatically appear on a credit report. A modest credit card used and paid in full every month builds more usable history than a large savings balance.
Keep the deposit liquid once you are within twelve months. The return on a locked-in account is not worth losing a property over.
Know your notice obligation. A month-to-month tenancy needs 60 days’ notice ending at the end of a rental period, under s. 44 of the Residential Tenancies Act. You cannot generally end a fixed term early. Overlapping a closing with a tenancy that has not been properly ended is an expensive way to learn this.
The commonest sequencing mistake I see is giving notice before the deal is firm. Do not do it. A financing condition can fail, and a notice, once given, cannot be unilaterally withdrawn.
The honest part
For a lot of people renting in Etobicoke right now, the arithmetic does not work yet, and the useful answer is a plan with a date on it rather than encouragement. If you send me your numbers I will tell you which it is. I would rather tell you to wait eighteen months and be right than tell you to buy and be wrong — the second one is how people end up in the renewal position that a lot of 2021 and 2022 buyers are in now.
Renting in Etobicoke and wondering when you can buy?
Send me your income, your savings and your timeline and I will tell you honestly what you can do now, what you could do in a year, and whether waiting is the better answer. If it is, I will say so. There is no obligation and I do not chase people.
connect@jatindua.com · 437-987-1925 · Book a free consultation
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Frequently asked questions
What is the minimum down payment in Ontario?
Five per cent on a purchase price of $500,000 or less. Between $500,000 and $1.5 million it is five per cent of the first $500,000 plus ten per cent of the portion above. At $1.5 million and above it is twenty per cent. Below twenty per cent you will typically need mortgage loan insurance.
What is the difference between a deposit and a down payment?
The deposit accompanies your offer, usually as a certified cheque or bank draft within about 24 hours of acceptance, and it forms part of your down payment. The down payment is the total equity you contribute, and the balance of it is not needed until closing. The deposit is the one that requires liquid money on short notice.
What rate will I be qualified at?
For an uninsured mortgage, OSFI sets the minimum qualifying rate at the greater of your contract rate plus two percentage points, or 5.25 per cent. You are approved on a payment you are not actually making.
Can I get a 30-year amortization as a first-time buyer?
Yes. Since 15 December 2024, 30-year insured amortizations are available to all first-time buyers and to all buyers of new builds. The insured mortgage price cap also rose to $1.5 million on the same date.
How much are closing costs in Toronto?
It varies with the price, but land transfer tax is the big one and in Toronto it is paid twice — provincial and municipal. First-time buyers can claim up to $4,000 from Ontario and up to $4,475 from the City, each within 18 months. Add legal fees, title insurance, a status certificate on a condominium, and adjustments.
When should I give notice on my rental?
Not until the deal is firm. A month-to-month tenancy requires 60 days’ notice ending at the end of a rental period under s. 44 of the Residential Tenancies Act, and you generally cannot end a fixed term early. A notice given before a financing condition clears cannot be unilaterally withdrawn.
Do my rent payments help my credit score?
Not automatically. Rent generally does not appear on a credit report unless it is being specifically reported. A modest credit card used and paid in full monthly builds more usable credit history than a large savings balance does.
Related reading
- Rent versus buy in Etobicoke: the arithmetic
- New-home HST relief: the eligibility checker
- Toronto land transfer tax: the bracket table from 1 April 2026
Sources
Every figure on this page traces to one of these, and each was read on 30 August 2026. Primary sources only — statute, regulation, and the government or agency that administers the rule. Where I could not verify something from a primary source, the page says so instead of guessing.
- Down payment. Financial Consumer Agency of Canada. Minimum down payment tiers and the mortgage loan insurance threshold. Accessed 30 August 2026.
- Boldest mortgage reforms in decades come into force today. Department of Finance Canada, 15 December 2024. Thirty-year insured amortizations for all first-time buyers and all buyers of new builds; insured mortgage price cap raised to $1.5 million. Accessed 30 August 2026.
- Minimum qualifying rate for uninsured mortgages. Office of the Superintendent of Financial Institutions. The greater of the contract rate plus two percentage points, or 5.25 per cent. Accessed 30 August 2026.
- Municipal Land Transfer Tax rebate opportunities. City of Toronto. First-time purchaser rebate to a maximum of $4,475, claimable within 18 months of the conveyance. Accessed 30 August 2026.
- Land Transfer Tax refunds for first-time homebuyers. Ontario Ministry of Finance. Maximum refund $4,000 since 1 January 2017; apply within 18 months. Accessed 30 August 2026.
- Residential Tenancies Act, 2006, S.O. 2006, c. 17 — e-Laws consolidation. Official consolidation. Consolidation period stated on the document: from July 1, 2026. Last amendment: 2025, c. 14, Sched. 12. Accessed 30 August 2026.
About the author — Jatin Dua, Etobicoke real estate agent
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke. I write these pages the same way I work a file: read the primary source, quote it, date it, and say plainly where the source is silent or where two sources disagree. If a figure on this page has no citation beside it, that is a mistake and I want to hear about it.
I work with buyers, sellers, renters and investors across Etobicoke, Mimico, Humber Bay Shores, New Toronto, Long Branch, Alderwood and Stonegate–Queensway. connect@jatindua.com or 437-987-1925.