First-time home buyers, London Ontario
Every program you qualify for, what they’re actually worth, and the number nobody tells you to budget for.
Direct answer
Minimum down payment in Canada is 5% on the first $500,000 of purchase price and 10% on the portion from $500,000 to $1.5 million; 20% is required above $1.5 million. First-time buyers in Ontario can combine the FHSA ($8,000/year to a $40,000 lifetime maximum, tax-deductible in and tax-free out), the Home Buyers’ Plan (up to $60,000 per person from an RRSP), the Ontario land transfer tax refund (up to $4,000), and 30-year amortization on insured mortgages.
Budget an additional 1.5% to 2% of the purchase price for closing costs. London has no municipal land transfer tax, unlike Toronto.
On this page
Down payment rules
| Purchase price | Minimum down payment | Example |
|---|---|---|
| Up to $500,000 | 5% | $450,000 home → $22,500 |
| $500,000 – $1,500,000 | 5% on first $500k, 10% on the rest | $700,000 home → $45,000 |
| Over $1,500,000 | 20%, no default insurance available | $1,600,000 home → $320,000 |
Below 20% down, default insurance (CMHC, Sagen or Canada Guaranty) is mandatory. The premium is 0.6% to 4.0% of the loan amount depending on your loan-to-value, and it’s added to the mortgage rather than paid up front. Ontario charges 8% PST on that premium, payable at closing: a line item that surprises people. On a $500,000 insured mortgage the PST alone can be over $1,000.
The programs, ranked by what they’re worth
1. First Home Savings Account (FHSA)
$8,000 per year, $40,000 lifetime. Tax-deductible going in, tax-free coming out for a qualifying first home. It is the RRSP and the TFSA combined, with no repayment obligation. If you are saving for a first home in any other account, move it here. Open one even if you can only fund it partially, contribution room only starts accumulating once the account exists.
2. Home Buyers’ Plan (HBP)
Withdraw up to $60,000 from an RRSP tax-free toward a first home; $120,000 for a couple. Funds must have been on deposit 90 days. Repayment starts after a grace period, spread over 15 years, and if you miss a year’s repayment, that amount becomes taxable income. Stackable with the FHSA.
3. Ontario land transfer tax refund
Up to $4,000 back for first-time buyers. Full elimination of provincial LTT on homes up to about $368,000, partial above that. Your lawyer typically claims it at closing so you never pay it.
4. 30-year amortization
Available on insured mortgages for first-time buyers and new-build purchasers. On a $500,000 mortgage the payment difference versus 25 years is roughly $200 a month. It also adds tens of thousands in total interest. Use it if it’s the difference between buying and not buying, not because it’s offered.
5. First-Time Home Buyers’ Tax Credit
A federal non-refundable credit worth up to $1,500. Claimed on your tax return the year you buy. Small, but free.
What you can actually afford
Two ratios govern the answer. Gross debt service should generally be at or under 39%: mortgage payment plus property taxes plus heat plus half of any condo fees, divided by gross income. Total debt service at or under 44% adds every other monthly obligation: car payments, credit card minimums, student loans and support payments.
All of it is calculated at the stress test rate: the greater of your contract rate plus 2%, or 5.25%. And note that a line of credit counts even if the balance is zero, at a percentage of the limit, one of the most common reasons a pre-approval comes back lower than expected.
Practical advice: get pre-approved before you look at listings, and treat the number as a ceiling rather than a target. The lender’s maximum and your comfortable maximum are rarely the same figure.
Closing costs in London, Ontario
| Item | Estimate |
|---|---|
| Ontario land transfer tax | $8,475 |
| Less first-time buyer refund | −$4,000 |
| Legal fees and disbursements | $1,800 |
| Title insurance | $400 |
| Home inspection | $500 |
| PST on default insurance premium (if under 20% down) | $1,000–$1,400 |
| Adjustments (prepaid property tax, utilities) | $500–$1,500 |
| Approximate total | $8,700–$10,100 |
London’s advantage: no municipal land transfer tax. The same purchase in Toronto would carry roughly $8,475 more.
Five expensive mistakes
- Buying a car during the mortgage process. A $600 car payment can reduce your mortgage qualification by roughly $100,000. Wait until after closing.
- Treating a pre-qualification as a pre-approval. One is a conversation; the other involves documents, a credit check and a rate hold.
- Forgetting closing costs. People save the down payment to the dollar and then scramble for $9,000 three weeks before closing.
- Changing jobs mid-application. Even for more money. Lenders verify employment again before funding.
- Waiving the financing condition to win a bidding war without a firm approval in hand. This one can cost you the deposit.
Written and reviewed by Derrick Johnston, Mortgage Agent Level 2, BRX Mortgage Inc. (FSRA #13463). Program rules and thresholds change; confirm current figures before relying on them.
Straight answers
Frequently asked questions
How much down payment do I need in Canada?
5% on the first $500,000 of purchase price, and 10% on the portion between $500,000 and $1.5 million. Above $1.5 million, 20% is required and default insurance is not available. On a $600,000 home the minimum is $35,000: 5% of the first $500,000 plus 10% of the next $100,000.
What is the FHSA and should I use it?
The First Home Savings Account allows contributions of $8,000 per year to a $40,000 lifetime maximum. Contributions are tax-deductible like an RRSP and qualifying withdrawals for a first home are tax-free like a TFSA. For nearly every first-time buyer it is the single best down payment vehicle available. It can be combined with the Home Buyers’ Plan.
How much can I withdraw under the Home Buyers' Plan?
Up to $60,000 per person from an RRSP, so $120,000 for a qualifying couple. Repayment begins after a grace period and is spread over 15 years. Funds must have been in the RRSP for at least 90 days before withdrawal.
Do first-time buyers pay land transfer tax in Ontario?
Ontario offers a first-time buyer refund of provincial land transfer tax up to $4,000, which eliminates the tax entirely on homes up to roughly $368,000 and reduces it above that. Toronto has an additional municipal land transfer tax and rebate; London does not, which meaningfully lowers closing costs here.
Can first-time buyers get a 30-year amortization?
Yes. Since December 2024, 30-year amortizations are available on insured mortgages for first-time buyers and for purchasers of newly built homes. A longer amortization lowers the monthly payment and increases total interest paid, so it is a cash flow decision, not a free upgrade.
How much are closing costs in London, Ontario?
Budget 1.5% to 2% of the purchase price for legal fees, title insurance, land transfer tax, home inspection, and adjustments. On a $600,000 purchase in London that is roughly $9,000 to $12,000, before the first-time buyer land transfer tax rebate is applied.
Next step
A 30-minute call tells you whether there's money on the table.
No application, no credit pull, no pitch. Bring your current mortgage balance, your renewal date, and a rough list of what you owe elsewhere. You'll leave the call knowing your options and what each one costs.