Home Purchase Mortgages in Ontario

How a Mortgage Broker Saves You Money on a Home Purchase

Banks offer you their products. A mortgage broker offers you the market. I compare rates and terms from major banks, credit unions, monoline lenders, and trust companies to find the lowest rate and best structure for your purchase. My services cost you nothing — lenders pay the broker fee on purchase transactions.

In Southern Ontario, where home prices in Hamilton, Burlington, Brantford, and St. Catharines have risen significantly, the difference between a 4.29% bank rate and a 4.04% broker rate on a $500,000 mortgage saves you over $7,000 in interest over a five-year term.

Down Payment Requirements in Canada

The minimum down payment in Canada depends on the purchase price of the property. These rules apply across Ontario — from a starter home in Caledonia to a lakefront property in the Kawarthas.

• 5% down on the first $500,000 of the purchase price
• 10% down on the portion between $500,001 and $1,500,000
• 20% down on any portion above $1,500,000

For example, a $700,000 home in Burlington requires a minimum down payment of $45,000 — that is 5% of $500,000 ($25,000) plus 10% of $200,000 ($20,000).

CMHC Mortgage Insurance

If your down payment is less than 20%, you are required to purchase mortgage default insurance through CMHC, Sagen, or Canada Guaranty. The premium is added to your mortgage balance and amortized over the life of the loan. Current premium rates are:

• 5% down (95% LTV): 4.00% of the mortgage amount
• 10% down (90% LTV): 3.10% of the mortgage amount
• 15% down (85% LTV): 2.80% of the mortgage amount
• 20% or more: No insurance required

On a $600,000 home in Hamilton with 5% down ($30,000), the insurance premium would be $22,800 added to the mortgage — a cost worth factoring into your planning.

2024-2025 Mortgage Rule Changes

Significant federal reforms took effect on December 15, 2024 that benefit buyers across Ontario:

• Insured mortgage cap raised to $1.5 million — previously $1 million. A $1.5M home now requires roughly $125,000 down instead of $300,000.
• 30-year amortization now available for all first-time home buyers with insured mortgages, lowering monthly payments by approximately 10%.
• 30-year amortization for new construction — available to all buyers of newly built homes, regardless of whether you are a first-time buyer.

These changes are especially impactful in markets like Burlington and Hamilton, where average home prices have crossed the previous $1M insured threshold.

The Mortgage Stress Test

Every mortgage in Canada — whether insured or uninsured — must pass the federal stress test. You must qualify at the higher of your actual contract rate plus 2%, or the Bank of Canada benchmark rate of 5.25%. This ensures you can handle potential rate increases over your term.

For example, if your contract rate is 4.04%, you must qualify at 6.04%. This affects how much you can borrow, which is why working with a broker to structure your application properly can make the difference between approval and denial.

Pre-Approval: Your First Step

A mortgage pre-approval gives you a guaranteed rate hold — typically 90 to 120 days — while you search for a home. It tells you exactly how much you can afford and signals to sellers that you are a serious, qualified buyer.

Pre-approval involves a credit check, income verification, and a review of your debts and assets. It does not guarantee final approval, which depends on the property appraisal and conditions, but it gives you a strong foundation to shop with confidence in competitive Ontario markets.

Closing Costs in Ontario

Beyond your down payment, plan for closing costs of 1.5% to 4% of the purchase price. In Ontario, these typically include:

• Ontario Land Transfer Tax: Graduated rates — 0.5% on the first $55,000, 1.0% on $55,001-$250,000, 1.5% on $250,001-$400,000, and 2.0% above $400,000
• Legal fees: $1,500-$2,500 plus HST and disbursements
• Title insurance: $200-$500 one-time premium
• Home inspection: $400-$600
• Appraisal fee: $300-$500 (sometimes covered by the lender)
• Property tax adjustment: Varies depending on closing date

First-time buyers in Ontario are eligible for a land transfer tax refund of up to $4,000.

First-Time Buyer Programs and Incentives

If this is your first home, you have access to several federal and provincial programs that can save you thousands:

• First Home Savings Account (FHSA): Contribute up to $8,000 per year ($40,000 lifetime). Contributions are tax-deductible and withdrawals for a qualifying home purchase are tax-free.
• Home Buyers’ Plan (HBP): Withdraw up to $60,000 from your RRSPs tax-free ($120,000 per couple). Combined with the FHSA, a couple can access up to $200,000 in tax-advantaged savings.
• Ontario Land Transfer Tax Refund: First-time buyers receive a refund of up to $4,000 on the Ontario LTT.
• First-Time Home Buyers’ Tax Credit: A $10,000 non-refundable federal tax credit worth $1,500 in tax savings.

Buying in Southern Ontario

Southern Ontario offers a wide range of housing options at various price points. Hamilton continues to attract buyers priced out of the GTA, with average home prices well below Toronto levels. Burlington offers a blend of urban amenities and waterfront living. Brantford and Caledonia provide excellent value for families looking for space. St. Catharines and the Niagara region appeal to buyers seeking affordability with easy access to the QEW corridor. The Kawarthas offer cottage country lifestyle with year-round communities.

Each market has its own dynamics, and the right mortgage structure depends on where and what you are buying. I work with clients across all of these communities and understand the local market conditions that affect your purchase.

Why Work With Dustin?

I compare rates from over 100+ lenders to find you the best deal — not just the best rate, but the right terms, prepayment privileges, and flexibility for your situation. My service is free for purchase transactions, and I guide you through every step from pre-approval to closing day.