First Time Home Buyer Mortgage Ontario: Your Complete 2025 Guide
Getting a first time home buyer mortgage in Ontario is one of the biggest financial decisions you’ll ever make. Whether you’re in Milton, Oakville, Burlington, or anywhere in the GTA, navigating the mortgage process can feel overwhelming—but you don’t have to do it alone. This comprehensive guide covers everything you need to know about securing your first time home buyer mortgage in Ontario in 2025.
What Qualifies You as a First-Time Home Buyer in Canada?
In Canada, you’re considered a first-time home buyer if you haven’t owned a home in the past four years. This means even if you owned a home previously, you may still qualify for first time home buyer mortgage Ontario programs if enough time has passed.
This definition applies to most government incentive programs, including:
- The Home Buyers’ Plan (HBP)
- The First-Time Home Buyer Incentive
- The First Home Savings Account (FHSA)
How Much Down Payment Do You Need for a First Time Home Buyer Mortgage in Ontario?
The minimum down payment in Canada depends on the purchase price of the home:
| Home Price | Minimum Down Payment |
|---|---|
| Under $500,000 | 5% |
| $500,000 to $999,999 | 5% on first $500K + 10% on remainder |
| $1 million or more | 20% |
Example: If you’re buying a $600,000 home in Milton, you’d need at least $35,000 down (5% of $500,000 = $25,000 + 10% of $100,000 = $10,000).
Understanding CMHC Mortgage Insurance
If your down payment is less than 20%, you’ll need mortgage default insurance (commonly called CMHC insurance). This protects the lender if you can’t make your payments. The premium ranges from 2.8% to 4% of the loan amount and is added to your mortgage.
The silver lining: CMHC insurance allows you to secure a first time home buyer mortgage in Ontario sooner—and often at lower interest rates than uninsured mortgages.
First Time Home Buyer Programs and Incentives in Ontario
Ontario offers several programs designed to help first-time buyers get into their first home:
1. First Home Savings Account (FHSA)
The FHSA lets you save up to $8,000 per year (lifetime maximum of $40,000) for your first home. Contributions are tax-deductible like an RRSP, and withdrawals for a home purchase are tax-free like a TFSA. It’s the best of both worlds for anyone planning to apply for a first time home buyer mortgage in Ontario.
2. Home Buyers’ Plan (HBP)
You can withdraw up to $60,000 from your RRSP tax-free to buy your first home (up to $120,000 for couples). Learn more about the Home Buyers’ Plan on the CRA website. You’ll need to repay the amount over 15 years, starting the second year after withdrawal.
3. Ontario Land Transfer Tax Rebate
First-time buyers in Ontario can receive a rebate of up to $4,000 on provincial land transfer tax. If you’re buying in Toronto, you can also get up to $4,475 back on the municipal land transfer tax—a combined savings of up to $8,475.
4. First-Time Home Buyer Tax Credit
The federal government offers a $10,000 non-refundable tax credit, which translates to up to $1,500 back on your taxes.
What Credit Score Do You Need for a First Time Home Buyer Mortgage in Ontario?
Most lenders require a minimum credit score of 620 for a mortgage with default insurance. However, a higher score means better rates:
| Credit Score | What to Expect |
|---|---|
| 620-679 | You’ll qualify, but may face higher rates |
| 680-719 | Good rates available from most lenders |
| 720+ | Best rates and most options available |
Credit challenges? Don’t give up. As a mortgage broker serving Milton and the GTA, I work with alternative lenders who specialize in helping buyers with credit challenges. Contact me to discuss your options.
Pre-Approval vs. Pre-Qualification: What’s the Difference?
Pre-qualification is an estimate of what you might afford based on self-reported information. It takes minutes but doesn’t carry much weight with sellers.
Pre-approval is a conditional commitment from a lender after reviewing your income, credit, and financial documents. It tells you exactly how much you can borrow and locks in your interest rate for 90-120 days.
In competitive markets like Milton, Oakville, and the GTA, a pre-approval letter makes your offer much stronger. Sellers know you’re a serious, qualified buyer ready to close.
The First Time Home Buyer Mortgage Ontario Process: Step by Step
Here’s what to expect when getting your first mortgage:
- Get pre-approved – Know your budget before you shop
- Find your home – Work with a realtor to find properties in your price range
- Make an offer – Include financing and inspection conditions
- Finalize your mortgage – Submit documents, complete appraisal, get final approval
- Close the deal – Sign with your lawyer, get the keys!
The entire process typically takes 30-60 days from accepted offer to closing.
Why Work with a Mortgage Broker for Your First Time Home Buyer Mortgage in Ontario?
Banks can only offer their own mortgage products. As a mortgage broker, I have access to over 50 lenders—including major banks, credit unions, and alternative lenders. This means:
- More options to find your best rate
- One application, multiple lenders
- Expert guidance through the entire process
- No cost to you—lenders pay my fee
First-time buyers especially benefit from working with a broker because the process is new and there’s a lot to learn. I’ll explain everything in plain English and make sure you understand your options.
Learn more about the mortgage services I offer to first-time buyers.
Frequently Asked Questions About First Time Home Buyer Mortgages in Ontario
How much can I afford?
A general rule is that your monthly housing costs (mortgage, taxes, heat) shouldn’t exceed 32% of your gross income. The best way to know for sure is to get pre-approved—it takes about 15 minutes and gives you a real number to work with.
Can I buy a home with less than 20% down?
Yes! Most first-time buyers purchase with 5-10% down. You’ll need mortgage default insurance, but this allows you to get into the market sooner rather than waiting years to save 20%.
What documents do I need for a first time home buyer mortgage in Ontario?
Typically you’ll need:
- Government ID
- Recent pay stubs
- Letter of employment
- T4s and Notice of Assessment (2 years)
- Bank statements showing your down payment
- Information about any existing debts
How long does pre-approval take?
The initial application takes about 15 minutes. Once you submit your documents, you’ll typically have your pre-approval within 24-48 hours.
Should I get a fixed or variable rate mortgage?
Both have pros and cons. Fixed rates offer payment stability, while variable rates are often lower but can fluctuate. I’ll help you understand which option makes sense for your situation during our consultation.
Ready to Get Your First Time Home Buyer Mortgage in Ontario?
The first step is always a conversation. I offer free, no-obligation consultations where we’ll review your situation, answer your questions, and map out your path to homeownership.
Whether you’re just starting to think about buying or you’re ready to get pre-approved today, I’m here to help. Serving Milton, Oakville, Burlington, Mississauga, Brampton, and the entire GTA.
Carl Zuzart is a licensed mortgage broker (License #M25001564) with Pineapple Mortgages, serving the Greater Toronto Area. Have questions? Call 289-298-2989 or email mortgages@zuzart.ca.
