If you are planning to buy a home in Toronto this year, chances are you have the same big question on your mind as almost every family we talk to: how much do we actually need for a down payment to buy a home in 2025?
It sounds like a straightforward question, but the answer depends on a few key things – the price of the home, whether your mortgage will be insured, and in some cases, whether you qualify as a first-time buyer. The good news is that the rules are fairly simple once you break them down, and a few changes in late 2024 actually made it easier for buyers in higher-priced markets like Toronto.
In this guide, we’ll walk through the basics of how a down payment to buy a home is calculated, show you what the numbers look like at real Toronto price points, and share some resources you can use to plan your next steps with confidence. Think of it as a roadmap to sizing your down payment to buy a home without guesswork.
Toronto Price Points: What a Down Payment to Buy A Home Looks Like
Sometimes the easiest way to wrap your head around the rules is to look at real examples. Here’s how a down payment to buy a home changes depending on the price point. These aren’t “forever” numbers – your lender will run exact figures and confirm insurance premiums – but they give you a sense of what to expect.
Example 1: A $600,000 condo
For a purchase at this level, your minimum down payment to buy a home is 5% of the first $500,000 ($25,000), plus 10% of the remaining $100,000 ($10,000). That brings your total to $35,000.
Example 2: A $950,000 townhouse
Here you’d need 5% of $500,000 ($25,000), plus 10% of the remaining $450,000 ($45,000). Total: $70,000.
Example 3: A $1,400,000 detached
Thanks to the new $1.5 million insured mortgage cap, this purchase still qualifies for the 5/10% rule. That’s $25,000 on the first $500,000, plus $90,000 on the remaining $900,000. Total: $115,000.
Example 4: A $1,600,000 detached
At this level, the home is above the insured cap, which means you’ll need a full 20% down payment to buy a home. That’s $320,000 upfront.
Curious what these numbers look like in real listings? Browsing our Toronto listings is an easy way to match down payment math with actual homes on the market.
Don’t Forget Closing Costs
Your down payment to buy a home isn’t the only cash you’ll need on hand. Buyers in Toronto should also plan for closing costs – things like legal fees, title insurance, a home inspection, moving expenses, and land transfer taxes. Ontario charges a provincial Land Transfer Tax, and Toronto adds its own municipal version on top. Both use tiered brackets, and both offer rebates for first-time buyers. A good rule of thumb is to set aside 1.5% to 2% of the purchase price for these extras. Your lawyer will give you the final number before closing, but planning ahead makes sure you aren’t caught off guard. Explore this in more detail by reading how micro-market differences can change your budget for both down payments and closing costs.
Smarter Ways to Build Your Down Payment
If you’re wondering how to pull the money together for your down payment to buy a home, there are a few programs designed to help Canadians save and access funds:
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- First Home Savings Account (FHSA). You can contribute up to $8,000 per year (to a lifetime max of $40,000). Contributions are tax-deductible, and withdrawals are tax-free if used to buy your first home.
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- Home Buyers’ Plan (HBP). First-time buyers can withdraw up to $60,000 from their RRSPs and repay it over time.
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- Combine them. Couples often use both – each opening an FHSA and topping up with the HBP – to reach their down payment goal faster.
Gifts from immediate family are also common. If you’re using gifted funds for your down payment to buy a home, your lender will likely need a simple letter confirming it’s a gift, not a loan. For families pooling resources across generations, our post on how to finance a home for multigenerational living expands on strategies that can make shared ownership easier to manage.
Insurance Premiums and Monthly Payments
If your down payment to buy a home is under 20%, you’ll need mortgage default insurance. The cost is added to your mortgage and depends on how much you put down. The smaller the down payment, the higher the premium.
The recent shift to 30-year insured amortizations for first-time buyers and buyers of new builds is also worth noting. It doesn’t change your minimum down payment, but it can stretch out payments and make them more affordable month-to-month – something many families appreciate during those early years of homeownership.
Remember though: lenders still use the stress test when qualifying you, meaning you’ll need to show you can handle payments at a higher rate than what you’ll actually pay. It’s a safeguard, and it’s still in place in 2025.
Toronto Context: Where Price Meets Lifestyle
Numbers are only half the story. The right down payment to buy a home also depends on the neighbourhoods you’re drawn to and the type of property that fits your family.
In Riverdale and Danforth Village, many families target semis and townhomes near transit. Bloor West Village and Roncesvalles offer walkability, parks, and schools that appeal to young families. Leaside and Willowdale tend to come with larger lots and detached homes, which often means higher down payments but also more long-term flexibility.
If you’re weighing different areas, our neighbourhoods guide is a helpful way to compare community feel, amenities, and accessibility while you’re crunching the numbers.
A Simple Framework for Finding Your Number
Here’s an easy way to calculate your own down payment to buy a home:
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- Choose a realistic price range based on homes you’d actually be happy living in – not just the cheapest options. (Our listings page is a good place to start.)
- Apply the national down payment formula. If the home is over $1.5 million, start with 20%.
- Add a cushion for closing costs – usually 1.5% to 2% of the purchase price.
- Map out funding sources. Add up your savings, FHSA, HBP withdrawals, and any gifted funds.
Sense-check monthly affordability with your lender. A pre-approval will tell you where your ceiling really is.
Bringing It All Together
Choosing the right down payment to buy a home isn’t just about hitting the minimum number. It’s about finding the balance between what gets you in the door and what keeps your monthly cash flow comfortable.
The changes in late 2024 – higher insured caps and 30-year amortizations – give Toronto families more flexibility in 2025. When you layer in savings tools like the FHSA and HBP, and budget carefully for closing costs, you’ll land on a number that feels both realistic and sustainable.
And if you’d like a second opinion while you’re working through scenarios, contacting our team is always a great start for professional advice. Sometimes a quick chat helps make the math feel less intimidating.
