Buying a home in Ontario is an exciting milestone. Before you start booking showings, it helps to know exactly what lenders look for and what costs to expect.
Here is a clear overview of what you need to buy a house in Ontario, including down payment rules, credit score guidelines, and the mortgage stress test in Canada.
1. Proof of Income and Employment
Lenders want to see steady income. Be prepared to provide:
- Recent pay stubs or a letter of employment
- Two years of T4s or tax returns if you are self employed
- Recent bank statements that show regular deposits
Getting a mortgage pre-approval early can clarify your budget and signal to sellers that you are serious.
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2. A Sufficient Down Payment
One of the core requirements to buy a house in Canada is your down payment. The minimum down payment in Ontario depends on the sale price:
- 5% for homes up to $500,000
- 10% for the portion from $500,000 to $999,999
- 20% for homes sold at $1,000,000 or more
If your down payment is under 20%, mortgage default insurance is required and is added to the mortgage.
If you are a first-time home buyer, there are helpful programs that can reduce upfront costs:
- First Home Savings Account (FHSA): save up to $8,000 per year tax-free toward your first home.
- Home Buyer’s Plan (HBP): withdraw up to $60,000 from your RRSP for your down payment, then repay over a set amount of time.
- Land Transfer Tax Rebates: you may qualify for both provincial and municipal rebates, which can save up to $8,475 combined at closing.
Taking advantage of these programs can make homeownership more achievable.
3. A Solid Credit Profile
Wondering what credit score you need to buy a house? Many lenders look for a score in the mid-600s or higher. A stronger score can improve your rate and approval chances. Helpful habits include paying bills on time, keeping credit balances low, and avoiding new credit right before applying.
4. Passing the Mortgage Stress Test in Canada
All borrowers must qualify at a higher rate, known as the stress test. Lenders assess you using the greater of the benchmark rate or your contract rate plus 2%. This check helps ensure you can still carry the mortgage if rates rise.
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5. Funds for Closing Costs
Budget for typical closing costs, usually 1.5% to 4% of the purchase price. These can include:
- Land Transfer Tax (provincial and possibly municipal)
- Lawyer fees and Title Insurance
- Home Inspection & Appraisal
- Adjustments for property taxes and utilities
For a full cost breakdown, take a look at A Guide to Real Estate Fees in Ontario.
6. A REALTOR® You Can Rely On
Buying a home isn’t just about finding the right property, it’s about making informed decisions at every step. An experienced REALTOR® will help you tailor your search to the right neighbourhoods, assess fair market value, and negotiate with confidence when it’s time to make an offer.
At The Ambler Real Estate Team, we take that a step further. Our clients benefit from:
- Local market expertise: We know Toronto’s diverse communities inside and out, from downtown condos to luxury homes across the city and GTA.
- Strong industry relationships: Our network of trusted mortgage specialists, home inspectors, and lawyers helps streamline the buying process.
- Strategic guidance: Whether it’s pricing advice, off-market opportunities, or timing your move with a sale, we guide you with clarity and transparency.
- Full-Service support: From your first consultation to your closing day, our team handles the details so you can focus on finding the home that fits your life.
Ready to Buy, or Need to Sell First?
The Ambler Real Estate Team supports buyers from pre-approval to closing, and we can also help you sell if you need to list before you purchase. Ask us about strategic staging, strong marketing, pricing analysis, and a clear timeline that aligns your sale and purchase.
Buying a house in Toronto? We can help! Call (416-884-8027) or email (team@amblerhomes.com).
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