Ontario / Greater Toronto Area · Reviewed October 26, 2026 · General residential guidance

1. Start with the payment and the complete budget

A mortgage payment is only part of home ownership. Keep a separate allowance for property taxes, utilities, home insurance, maintenance, condominium fees where applicable, and unexpected repairs. Choose a borrowing level that leaves room for changes in income and expenses.

Prepare income documents, information about existing debts and evidence of the down payment. Ask your lender what documents it needs for your employment situation and the type of property. Explain planned changes in employment, borrowing or ownership before relying on an assessment.

Reference: FCAC: preparing for a mortgage.

2. Distinguish down payment, deposit and insurance

The down payment is the portion of the purchase price you fund rather than borrow through the purchase mortgage. The offer’s deposit has its own contractual amount, timing and handling requirements; have your representative and lawyer explain how it is credited on completion. Keep additional closing funds available.

For an eligible owner-occupied purchase, the published minimum down-payment structure is:

• Up to $500,000: 5% of the price.
• Above $500,000 and below $1,500,000: 5% on the first $500,000, plus 10% on the remainder.
• $1,500,000 or more: 20% of the price.

These are minimums, not approval guarantees. A lender may require more, and investment or unusual properties can have different requirements. With less than 20% down, mortgage default insurance is generally required for eligible loans. It protects the lender, not the borrower. Ask about premiums, any financed premium, and cash required for applicable provincial tax.

References: FCAC: down payments · CMHC: Purchase eligibility.

3. Separate the term from the amortization

The term is the period covered by your current mortgage contract. Amortization is the scheduled repayment period. A five-year term does not usually mean the entire mortgage is repaid in five years; an outstanding balance commonly remains to be renewed or repaid.

With other assumptions unchanged, extending amortization lowers scheduled payments but increases total interest over the repayment period. A shorter amortization raises payments and reduces interest. Compare both the monthly commitment and the longer-term cost.

CMHC’s standard Purchase program generally permits up to 25 years; eligible first-time buyers or purchasers of newly built homes may qualify for up to 30 years through Home Start. Uninsured product limits depend on the lender. A 35-year option in a calculator does not establish eligibility or indicate that insured financing is available for that duration.

References: FCAC: terms and amortization · CMHC Home Start.

4. Compare fixed and variable products carefully

Fixed rate: the contract interest rate remains unchanged during the term. This provides rate certainty for that term, but does not guarantee the rate or payment at renewal.

Variable rate: the rate can change during the term. Depending on the product, payments may adjust, or the payment may initially stay fixed while the split between interest and principal changes. With fixed-payment variable products, rising rates can trigger required action and may leave insufficient principal repayment.

Ask the lender to demonstrate what happens if rates increase or decrease, when payments can change, and whether conversion is available on acceptable terms. Neither type is guaranteed to cost less. Select based on the contract, cash-flow resilience and your plans, rather than a rate forecast alone.

Reference: FCAC: mortgage interest and variable-rate risks.

5. Understand qualification and pre-approval

For a new purchase mortgage at a federally regulated lender, qualification generally includes a stress test using the higher of 5.25% or the contract rate plus two percentage points. This qualifying rate is used for assessment; it is not necessarily the interest rate charged. Other lenders and transaction types may have different requirements.

A pre-approval remains conditional. Final underwriting considers the borrower, property and required documentation. Ask what remains outstanding before your offer becomes firm and obtain advice before waiving financing protection. A rate hold does not guarantee that the lender will finance a particular property.

References: FCAC: qualification and stress testing · FCAC: pre-approval.

6. Compare flexibility, fees and exit costs

Review prepayment privileges, lump-sum limits, payment-increase options and restrictions. Exceeding a privilege, selling, refinancing or changing lenders before maturity may result in charges under a closed mortgage. Penalty methods differ; obtain a written estimate for your actual mortgage rather than assuming every lender uses the same calculation.

Ask whether a proposed move can qualify for portability, what deadlines apply, and what happens if the new property or loan amount changes. Portability is subject to the product and lender’s approval. Compare discharge, administration, appraisal, legal and other applicable costs alongside the interest rate.

References: FCAC: prepayment privileges and penalties · FCAC: breaking a mortgage contract.

7. Review first-home programs individually

An FHSA can provide tax advantages for eligible first-time buyers; account-opening, contribution and qualifying-withdrawal rules apply. The Home Buyers’ Plan permits eligible RRSP withdrawals, currently up to $60,000, with repayment and other conditions. Program definitions of a first-time buyer are not interchangeable. Have a tax adviser confirm eligibility, timing and the consequences of a withdrawal before transferring funds.

References: CRA: FHSA · CRA: Home Buyers’ Plan.

8. Read the listing calculator as an estimate

Our sale-listing calculator starts with the advertised property price, which may differ from the agreed purchase price. Check the price, down payment, interest rate and amortization before using its result. A dated published bank reference rate is illustrative; it is not a live rate feed, personalised quote, commitment or approval.

The displayed mortgage payment does not represent the complete cost of ownership or closing. Ask your lender to confirm applicable insurance, taxes, fees, payment frequency, compounding and all contractual terms. A constant-rate variable calculation is a scenario, not a forecast of future payments.

Reference: FCAC mortgage calculator.

Questions to take to your lender

• What is the written rate offer, its expiry and every eligibility condition?
• What cash must I provide at closing, including costs outside the down payment?
• What happens to the payment and balance if variable rates rise?
• What would selling or refinancing during the term cost?
• What documents and property checks remain before final approval?