Get clear answers, including down payment, pre-approval, stress test, closing costs, credit score, and first-time buyer tips
1) How much down payment do I need in Ontario?
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For an owner-occupied home in Canada, the federal minimum down payment rules apply in Ontario too. You need 5% on the first $500,000 of the purchase price, 10% on the portion from $500,000 to $1,499,999, and 20% if the purchase price is $1.5 million or more because mortgage default insurance is not available at $1.5M and above. Example: on a $750,000 home, the minimum down payment is $50,000. (Canada Mortgage and Housing Corporation)
2) Do I need CMHC insurance if I put less than 20% down?
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Yes. If your down payment is less than 20%, you generally need mortgage default insurance. That insurance protects the lender, not you. The premium is usually added to the mortgage amount, and current federal guidance says premiums typically range from 0.6% to 4.5% of the mortgage, depending mainly on your loan-to-value ratio and down payment size.
3) What is the mortgage stress test in 2026?
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For federally regulated lenders, borrowers generally must qualify at the greater of their contract rate + 2% or 5.25%. OSFI confirms that this minimum qualifying rate for uninsured mortgages is still the rule in 2026. FCAC also notes that banks use this same higher-of formula in its mortgage qualifier guidance. One useful change: OSFI says the stress test no longer applies to an uninsured straight switch from one federally regulated lender to another.
4) How much mortgage can I actually qualify for?
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Lenders do not approve you based on vibes and optimism. They look at income, debts, property taxes, heating costs, and the stress-tested payment. FCAC’s mortgage qualifier tool uses GDS of 39% and TDS of 44% as the normal guideline. That means your housing costs usually should not exceed about 39% of gross income, and your total debts usually should not exceed about 44%. Some lenders may have tighter policies.
5) What is the difference between pre-approval and final approval?
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A pre-approval is not a guaranteed mortgage. It is an early review of your finances that estimates what a lender may lend and at what rate, usually after reviewing income, assets, debt, and often your credit. Final approval still happens after you have a specific property under contract and the lender reviews the full file, including the property itself. CMHC explicitly notes that even with a pre-approved mortgage certificate, you still need final mortgage approval during the conditional offer period.
6) What documents do I need to get pre-approved for a mortgage?
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Expect to provide ID, proof of employment, proof of income, proof of down payment, proof you can cover closing costs, information on assets, and information on debts and financial obligations. CMHC also notes buyers should be ready to show enough money for closing costs, which are usually 1.5% to 4% of the purchase price. Translation: if the money trail is messy, the file gets messy.
7) How much are closing costs in Ontario?
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A good working range is 1.5% to 4% of the purchase price, on top of your down payment. In Ontario, one of the biggest closing costs is usually land transfer tax. Ontario’s current land transfer tax rates are 0.5% up to $55,000; 1.0% from $55,000 to $250,000; 1.5% from $250,000 to $400,000; 2.0% above $400,000 for land with one or two single-family residences; and 2.5% above $2,000,000 where the land contains at least one and no more than two single-family residences. Eligible first-time buyers in Ontario may get a refund of up to $4,000.
8) Can I get a 30-year amortization now?
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Yes, but not for everyone. As of December 15, 2024, if your down payment is less than 20%, the maximum amortization is now 30 years if you are a first-time home buyer or are buying a newly built home. In all other insured high-ratio cases, the maximum is generally 25 years. If your down payment is more than 20%, your lender sets the maximum amortization. Also, some insurers note an extra premium may apply for insured mortgages with amortizations above 25 years.
9) Should I choose a fixed or variable mortgage?
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There is no one-size-fits-all “best” mortgage. The correct answer depends on your risk tolerance, payment flexibility, and how long you’ll keep the mortgage. A fixed-rate mortgage gives payment/rate certainty for the term. A variable-rate mortgage can change with the lender’s prime rate, so your cost can rise or fall. On top of that, closed mortgages usually have lower rates but higher break restrictions, while open mortgages are more flexible but usually cost more. The right answer is not “whatever has the flashiest ad.” It is the option you can still live with when life gets expensive.
10) What credit score do I need for a mortgage in Ontario?
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There is no single universal legal minimum credit score for all mortgages in Canada. Lenders set their own underwriting rules, and FCAC notes that weak credit can lead to a refusal or require a co-signer. For CMHC-insured files, CMHC materials say at least one borrower or guarantor generally needs a minimum credit score of 680, although CMHC may consider alternative ways of establishing creditworthiness for some borrowers without a conventional credit history, such as some newcomers.
Can I use RRSPs for a down payment?
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Yes. Under the federal Home Buyers’ Plan, you can currently withdraw up to $60,000 from your RRSP to buy or build a qualifying home if you meet the conditions.
Can I use an FHSA too?
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Yes. CRA says you can make a qualifying FHSA withdrawal for the same qualifying home if you meet the conditions. The FHSA annual participation room starts at $8,000, subject to the program’s rules and carryforward limits.
Does a pre-approval mean I should shop at the top of my budget?
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No. Pre-approval tells you what a lender may allow, not what will feel comfortable when daycare, hockey, groceries, and life itself start swinging chairs. FCAC and CMHC both push affordability tools first for a reason. Buying below your max is often the smarter move, not the less glamorous one. (Canada Mortgage and Housing Corporation)
Best practical takeaway:
The biggest mortgage mistakes are brutally predictable:
buying based on the maximum approval instead of the comfortable payment, forgetting closing costs, assuming a pre-approval is final approval, and not understanding how the stress test cuts borrowing power.
The rules are federal, but Ontario buyers get hit especially hard when they ignore land transfer tax and closing cash. That part is where dreams go from Pinterest to panic.
