By The Richards Group
Picture the first morning in a place that's finally yours, coffee on the porch, the Danforth waking up down the street, the lake a short walk south. For most of us, the path to that morning starts with one number: the down payment. It's the first real step, and with a clear plan, it's far more reachable than it looks.
Key Takeaways
- In Canada, the minimum down payment is 5% on the first $500,000 of a home's price and 10% on the portion above that, up to the insured limit.
- Homes priced at $1.5 million or more require at least 20% down, since mortgage insurance isn't available above that threshold.
- The FHSA and the RRSP Home Buyers' Plan are the two strongest tax-sheltered ways to build a down payment faster.
- A steady, automated savings habit, paired with a realistic target date - is what turns the goal into a home.
Know Your Number
Before you save a dollar, it helps to know exactly what you're saving toward. In Toronto's market, the down payment isn't a flat percentage,it scales with the price of the home, and that shifts your target more than most buyers expect.
Knowing your number early shapes everything that follows: your timeline, your monthly savings, even which neighbourhoods make sense. (The figures below reflect 2026 rules; a mortgage professional can confirm what applies to your situation.)
Knowing your number early shapes everything that follows: your timeline, your monthly savings, even which neighbourhoods make sense. (The figures below reflect 2026 rules; a mortgage professional can confirm what applies to your situation.)
What Toronto buyers actually need down
- Under $500,000: a minimum of 5% of the purchase price.
- $500,000 to $1,499,999: 5% on the first $500,000, plus 10% on the amount above it - so a $900,000 home needs roughly $65,000.
- $1,500,000 and up: at least 20%, because mortgage default insurance no longer applies at that price.
- Anything under 20% down: expect to carry mortgage default insurance from CMHC or a private insurer, which protects the lender and lets you buy sooner.
Put the Right Tools to Work
Saving in a regular account works, but Toronto's prices reward buyers who let the tax system do some of the lifting. Two registered accounts were built for exactly this moment, and together they can move your timeline up by years.
Used well, they don't just shelter your savings, they add to them.
Used well, they don't just shelter your savings, they add to them.
The accounts worth opening first
- First Home Savings Account (FHSA): contribute up to $8,000 a year toward a $40,000 lifetime limit; contributions are tax-deductible, and withdrawals for a first home come out tax-free.
- RRSP Home Buyers' Plan (HBP): withdraw up to $60,000 from your RRSP toward a first home, then repay it over time without tax.
- TFSA: a flexible companion for anything beyond those limits, with tax-free growth you can reach anytime.
Build a Habit That Sticks
The buyers who get there fastest treat saving like a fixed cost, not a leftover. A down payment rarely arrives as one big windfall. It's built quietly, month after month, until one day the number is real.
The trick is making it automatic and giving it a deadline. A goal with a date behind it has a way of happening.
The trick is making it automatic and giving it a deadline. A goal with a date behind it has a way of happening.
Habits that move the needle
- Automate a transfer into your FHSA or TFSA the day you're paid, before anything else has a claim on it.
- Set a realistic target date, then work backward to a monthly amount you can actually sustain.
- Keep the down payment somewhere stable and accessible -this isn't money to put at risk.
- Revisit the plan as the market moves; we're always glad to help you read where East Toronto is heading.
FAQs
Do I really need 20% down to buy in Toronto?
Not for most homes. The minimum is 5% on the first $500,000 and 10% above that, up to the insured cap, so many Toronto buyers start with well under 20%. Putting less down means carrying mortgage default insurance, but it also means stepping into the market and building equity sooner.
What's the difference between the FHSA and the RRSP Home Buyers' Plan?
The FHSA is a dedicated first-home account: up to $8,000 a year, $40,000 in total, with tax-deductible contributions you never have to repay. The HBP lets you borrow up to $60,000 from your existing RRSP, which you then pay back over time. Plenty of first-time buyers use both together to reach their number faster.
Beyond the down payment, what else should I budget for?
Closing costs are the piece people tend to forget, and among them Toronto's land transfer tax, charged at both the provincial and municipal level. First-time buyers can claim rebates on both, but it's wise to set aside extra for legal fees, a home inspection, and the move itself. We'll walk you through the full picture before you commit to anything.
Connect with The Richards Group Today
A down payment is really just the price of admission to a life you've been picturing - mornings in Leslieville, weekends on the Beaches boardwalk, a front door that's yours. Saving for it takes patience, but it's a goal with a clear finish line, and every month brings it closer.
When you're ready to turn that saving into an address, we'd love to help. As The Richards Group Re/Max Hallmark - East Toronto's #1 Real Estate Brokerage, we know this market block by block, and we'll help you plan the move with clear eyes. Reach out to The Richards Group and let's find the place that's worth saving for.
When you're ready to turn that saving into an address, we'd love to help. As The Richards Group Re/Max Hallmark - East Toronto's #1 Real Estate Brokerage, we know this market block by block, and we'll help you plan the move with clear eyes. Reach out to The Richards Group and let's find the place that's worth saving for.
