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What Buying a Home Actually Costs in Canada

What you owe beyond the down payment, and which half of it your lender will actually carry.

By Nate Sorensen Reviewed for accuracyUpdated Sep 202615 min read
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You've saved a down payment, and you're close enough to be looking at listings. There's a second set of costs behind that one, and they don't all work the same way. Some can be rolled into your mortgage and paid off over the life of it. The rest has to be there in cash the week you take possession, on top of what you're borrowing. Once you've sorted what you owe into those two piles, you know whether you can close on the house you're looking at.

Key takeaways

  • Your minimum down payment stops being a flat 5% once the price passes $500,000. On a $600,000 home you'll need $35,000, which is 5.83% of the price.
  • Mortgage default insurance protects your lender, not you. You're the one paying, and with 5% down it's 4.00% of your loan.
  • You can add that premium to your mortgage. You can't add the provincial sales tax on it, and in Quebec, Ontario and Saskatchewan that tax is due in cash the day you close.
  • Your land transfer tax is due on closing day, and if you're buying in Toronto you'll pay the city's on top of Ontario's. It's the cash cost you're most likely to meet late.
  • If you're buying a new build at $1,000,000 or less and it's your first home, you may get the whole federal GST back. On an $800,000 home that's $40,000.

What's the least you can put down?

The rule changes at $500,000. Below that price you need 5% of the price. Between $500,000 and $1.5 million you need 5% of the first $500,000 plus 10% of everything above it. At $1.5 million and over you need 20%.1

On a $600,000 home your minimum is $25,000 plus $10,000, which is $35,000. That works out to 5.83% of the price, and it's $5,000 more than a flat 5% would have had you saving.

What the minimum down payment is, by price
Minimum down payment by purchase price in CanadaThree bands. Below five hundred thousand dollars, the minimum is five per cent of the price. Between five hundred thousand and one point five million, it is five per cent of the first five hundred thousand plus ten per cent of the amount above that. At one point five million and over, it is twenty per cent of the price. A worked marker shows that on a six hundred thousand dollar home the minimum is thirty five thousand dollars, which is 5.83 per cent, not the thirty thousand dollars a flat five per cent would give.Under $500,0005%of the price$500,000 to $1.5 million5% of the first $500,000plus 10% above it$1.5 million and over20%of the pricePurchase priceWorked at $600,000A flat 5% would be$30,000The actual minimum is$35,000
The middle band is where the 5% you've been quoted stops being accurate. On a $600,000 home you'd need $35,000, not $30,000.
Source Financial Consumer Agency of Canada, Down payment. Accessed 2026-09-06. The $600,000 figure is worked from the rule on that page.

Anything under 20% down and your loan has to be insured.1 Even at 20% a lender can require it anyway, and that comes up most often if you're self-employed or your credit history is poor.1

Who does mortgage default insurance protect?

Your lender. You pay the premium and your lender gets the cover, and none of it comes to you.1 That's the reverse of nearly every other policy you'll buy, and if you stop paying it's your lender who gets paid, not you.

The premium is a percentage of your loan, and it climbs as your down payment gets smaller. Your lender works from a scale set by the Canada Mortgage and Housing Corporation, or CMHC.2

What the premium costs, by how much of the price you're borrowing
CMHC premium rate by loan to value bandSix bands of loan to value with their premium rates. Up to and including sixty five per cent, the premium is 0.60 per cent of the loan. From 65.01 to 75 per cent it is 1.70 per cent. From 75.01 to 80 per cent it is 2.40 per cent. From 80.01 to 85 per cent it is 2.80 per cent. From 85.01 to 90 per cent it is 3.10 per cent. From 90.01 to 95 per cent the premium is 4.00 per cent, and below one and a half million dollars that is the band a buyer making the minimum down payment falls into. A seventh row notes that a non traditional down payment in the top band is charged a premium of 4.50 per cent.Share of the price you're borrowingPremium, as a share of the loanUp to 65%0.60%65.01% to 75%1.70%75.01% to 80%2.40%80.01% to 85%2.80%85.01% to 90%3.10%90.01% to 95%4.00%the minimum down payment lands hereA non-traditional down payment in the top band, such as borrowed funds, pays a 4.50% premium.
Below $1.5 million, the minimum down payment puts you in the top band, so you're paying 4.00% of your loan.
Source CMHC, Mortgage loan insurance cost. Accessed 2026-09-06.

On that $600,000 home, your loan is $565,000 and you're borrowing 94.17% of the price, so you're in the top band. The premium is 4.00% of $565,000, or $22,600.2

You can add that premium to your mortgage instead of paying it on closing day.2 It then carries interest every year until the loan is paid off, so the true cost is more than $22,600. You can see what it does to your monthly payment with the mortgage payment calculator.

If your home meets an energy efficiency standard, a refund of up to 25% of the premium may be available.2 The wording you'll see is "may be", so it isn't something you can count on until it's confirmed.

This cover isn't the policy a bank offers you at signing that pays your mortgage if you get sick or lose your income. That one's creditor protection insurance. It's optional, and it covers you rather than your lender.3 If it's your income stopping that worries you rather than your health, EI after a job loss covers what you'd actually receive. "Protect the Plan," where Maya gets both pitches in one week is the story version of the difference.

Quebec, Ontario and Saskatchewan tax the premium, and you pay that in cash

If you're buying in Quebec, Ontario or Saskatchewan, you owe provincial sales tax on the insurance premium itself.2

You can add the premium to your mortgage. You can't add the tax on it. You pay it in cash on closing day, on top of your down payment and everything else you owe.2 On the $600,000 example the premium is $22,600, and the tax your province charges is calculated on that amount.

Your lender folds the premium into what you're borrowing, so it's easy to read the whole thing as financed.

Land transfer tax, and who charges it

You pay a tax when the property changes into your name. Your province sets that rate, not Ottawa. Some cities charge you one of their own on top, so two buyers paying the same price in different provinces can owe very different amounts.

Ontario and British Columbia set their own rates, and if you're buying in Toronto the city charges a municipal one on top of Ontario's.

WhereWhat you pay
Ontario40.5% to $55,000 · 1.0% to $250,000 · 1.5% to $400,000 · 2.0% above that · 2.5% above $2,000,000 on land with one or two single family homes on it
Toronto, on top of Ontario's6The same bands to $2,000,000, then 2.5% to $3,000,000 · 4.40% to $4,000,000 · 5.45% to $5,000,000 · 6.50% to $10,000,000 · 7.55% to $20,000,000 · 8.60% above that. The high-value bands apply to property with at least one and not more than two single family residences on it. Other property follows a shorter table stopping at 2.0%
British Columbia81% to $200,000 · 2% to $2,000,000 · 3% above that, plus a further 2% on residential value above $3,000,000. Charged on fair market value at registration, unless you qualify for an exemption or you're buying a pre-sold strata unit

Toronto's high-value bands only started on April 1, 2026, so a rate table you found somewhere else, published before then, reads too low above $3,000,000.6 And in British Columbia the further 2% stacks on the 3% rather than replacing it, so the slice above $3,000,000 is taxed at 5%. On a $4,000,000 home that's $98,000 plus $20,000, which is $118,000.8

Everywhere else the rules vary, and there's no national table to check, so your own real estate lawyer is where you get your figure before closing.

A $600,000 home in Toronto costs you $8,475 in Ontario tax, and the city charges the same amount again, so $16,950 before any rebate, all of it in cash.46 The insurance premium on that same house is $22,600, and your lender will carry that one for you.

Toronto also charges you an administration fee of $102.56 plus HST on the transaction. A rebate you ask for after registration rather than at it costs another $221.22.6

What you can claim back if this is your first home

Five separate things, run by three different governments, and they don't define a first-time buyer the same way.

Ontario's land transfer tax refund gives you back up to $4,000, which means no Ontario land transfer tax at all on a first home costing about $368,000 or less.5 Above that you pay the difference.

Toronto's rebate gives you back up to $4,475, and its test is unusually strict.7 You can't ever have owned a home, or any ownership interest in one, anywhere in the world, at any time. Your spouse's ownership during your marriage disqualifies you too. You've also got to be 18 or over, a Canadian citizen or permanent resident, and living there within nine months.

The home buyers' amount lets you put up to $10,000 on line 31270 of your return. More than one of you can claim part of it for the same home, but CRA caps the total everyone claims on one home at the year's maximum, so you and a partner share a single $10,000 rather than taking $10,000 each.9 It's non-refundable, so it only helps if you owe tax that year. The test is that you and your spouse didn't live in a home either of you owned, in the year you buy or the four years before that.

The Home Buyers' Plan lets you pull as much as $60,000 from a registered retirement savings plan, or RRSP, without tax, provided you pay it back over fifteen years.10 If you make your first withdrawal between 2026 and the end of 2028, repayment doesn't start for five years, so a 2026 withdrawal is first repayable in 2031.10

The GST rebate on a new build is the largest of the five, and you only reach it if you're buying new. Both GST rebates are for new and substantially renovated homes only, so neither reaches you on a resale purchase, though the other four still do. A sale by someone who isn't a builder carries no GST at all, which is why you pay none on most resale purchases. But the law counts a substantial renovator as a builder, and substantial is a high bar. CRA's test is roughly the whole interior of the house you're looking at, 90% of it or more, stripped out and replaced.11 If you're buying a house like that from whoever did the work, it's taxable.12 A new kitchen and a couple of bathrooms will not put you anywhere near it.11 If it's your first home and the price is $1,000,000 or less, you get back 100% of the GST, or of the federal part of the HST.11 Between $1,000,000 and $1,500,000 you get less of it. At $1,500,000 it's gone. On an $800,000 new home that GST is $40,000, and your rebate wipes it out. If you're buying in Ontario, you can claim the provincial part of your HST as well, on the same eligibility conditions as the federal rebate.11 It's built the same way. Under $1,000,000 you can have the whole provincial part, to a ceiling of $80,000, and from there up to $1,500,000 your share of it shrinks.11

The conditions on yours are tight. Construction has to have begun on or after March 20, 2025 and before 2031, and be finished before 2036, or your claim fails. You can claim it once in your life, and your first-time test is the calendar year plus the four before it, with a home your spouse owned counting against you.11

There's a sixth, older and smaller, and it's open to you whether or not you've owned before: 36% of the GST on a new home, in full at $350,000 or less and nothing at all at $450,000 or more.11

A $600,000 first home in Toronto, split by what your lender will carry
What a lender will finance and what you pay in cash, on a $600,000 Toronto purchaseTwo columns. On the left, the cost a lender will carry: mortgage default insurance of twenty two thousand six hundred dollars, added to the mortgage. On the right, the cash due on closing day: a down payment of thirty five thousand dollars, plus land transfer tax of eight thousand four hundred and seventy five dollars, which is the figure left after both first-time buyer rebates have come off sixteen thousand nine hundred and fifty. Together those two come to forty three thousand four hundred and seventy five dollars. Legal fees, the inspection, the appraisal and title insurance are cash on the same day as well.Your lender will carry thisYou bring this in cashMortgage default insurance$22,600added to the mortgage,then paid off with interestDown payment $35,000Land transfer tax $8,475down from $16,950, after both rebates$43,475these two costs aloneYour lawyer, the home inspection, the appraisal and title insurance are cash on the same day.Each of those four quotes you its own fee, so no figure is shown for them.In Quebec, Ontario and Saskatchewan, the provincial sales tax on the $22,600 premiumis cash as well. A lender will finance the premium but not the tax on it.
A worked example. You pay your lawyer, your home inspector, your appraiser and your title insurer on the same day, and they're cash too.
Source Worked from FCAC, CMHC, Ontario Ministry of Finance and City of Toronto rates, all accessed 2026-09-06. The split between financed and cash is calculated, not quoted.

The four costs you have to ask about

Your lawyer sets their own fee. So do your home inspector, your appraiser and your title insurer. There's no rate for you to look up, so you pay whatever each of them quotes you.

Each of them will put a figure in writing for you, and you can have all four before you make an offer.

As an example only: setting aside $2,000 to $4,000 for the four would put you in the right area on a purchase this size, though your own four quotes will land wherever they land.

Where you buy, and what you're buying

Your total moves with more than the price you pay, and these are the things that shift it most.

Your province, and your city. Between them they set your land transfer tax, whether you owe a municipal one on top, and whether you owe provincial sales tax on your insurance premium.

New build or resale. Both GST rebates are for new and substantially renovated homes, so a resale purchase puts you outside them. On a new one, if it's your first home, you may get your whole GST back.11

Whether you've owned before. Several rebates and credits turn on your answer, and they don't all use the same test.

How much you put down. Your premium band moves with it. At the minimum you pay 4.00% of your loan. At 10% down that drops to 3.10%, and at 20% down you usually need no insurance at all.12

How your lender reads you. Self-employment and a poor credit history are both grounds for it to require insurance even with 20% down.1

One of the five isn't published anywhere. Whether your lender wants your loan insured at 20% down is its own call, and it tells you before you're committed to anything.

A first home, and a second one

Maya, buying her first place at $450,000 in Ontario, outside Toronto. Her minimum down payment is 5%, or $22,500, so she borrows $427,500 and pays a 4.00% premium of $17,100 on the mortgage.12 Her Ontario land transfer tax is $5,475, and the first-time refund covers $4,000 of it, leaving $1,475 to pay.45 Because she's in Ontario she also owes provincial sales tax on that $17,100 premium, in cash, on top of the rest. Her lawyer's fee is the last figure she needs, and it arrives as a written quote. "Sinking Funds" is where she works out how to save for a cost she can see coming.

Nadia and Theo, moving up to a $600,000 house with two kids. Their minimum down payment is the blended one, $35,000, and their premium is 4.00% of a $565,000 loan, which is $22,600 on the mortgage.12 Because they already own, none of the five first-time claims is open to them, so nothing comes back on this purchase and they're carrying the full cash side. "The Same Page" is the conversation they have before they price anything.

How most buyers find the cash

Your lender will add the insurance premium to your mortgage.2 So most people buying with the minimum down payment finance the premium and keep their cash for the land transfer tax and the lawyer. It costs them more in the end, and most take that trade anyway.

Most first-time buyers in Ontario count their refund before they set a price rather than after, since a refund they qualify for moves what they can afford by several thousand dollars.

And plenty of buyers discover they're limited by the cash they can bring rather than by the down payment. That's the ordinary way round, and most of them find out early enough to look at a different price.

?

Common questions

Can I add my closing costs to my mortgage?

The mortgage default insurance premium, yes. The provincial sales tax on that premium, no, and in Quebec, Ontario and Saskatchewan you pay it in cash on closing day. Your land transfer tax and your lawyer's fee are cash as well.

Can I use my RRSP for the down payment?

You can take out up to $60,000 under the Home Buyers' Plan without tax, as long as you repay it. If your first withdrawal falls between 2026 and the end of 2028, your repayments don't start for five years, so a 2026 withdrawal is first repayable in 2031.

Is mortgage default insurance the same as mortgage life insurance?

No. Mortgage default insurance protects your lender if you stop paying, and you can't avoid it below 20% down, though a lender can still ask for it above that. The policy a bank offers to cover your payments if you get sick or lose your income is creditor protection insurance. That one's optional, and it covers you.

Do the GST rebates apply if I'm buying resale?

No. Both of them are for new and substantially renovated homes, so buying resale puts you outside them. If you're buying new and it's your first home, and you're paying $1,000,000 or less, the whole federal GST can come back to you, as long as your build meets the start and finish dates the rebate sets.

How much is land transfer tax in my province?

It depends where you are, because provinces set their own and some cities add one on top. Ontario, Toronto and British Columbia each publish theirs. Everywhere else you're under your own province's rules, and there's no national table to check. Your real estate lawyer confirms your figure before closing.

What counts as a first-time buyer?

It depends which rebate you're claiming. Toronto asks that you've never owned a home anywhere in the world at any time. The federal home buyers' amount only asks about the year you buy and the four before it. The GST rebate on a new build uses that same four-year test, and all three count a home your spouse owned.

Sources

  1. FCACDown payment. Supports the 5%, blended and 20% minimums, the insurance requirement below 20% down, a lender's discretion to require it at 20%, and that the cover protects the lender rather than the buyer. Accessed 2026-09-06.
  2. CMHCMortgage loan insurance cost. Supports the full premium schedule, the 4.00% and 4.50% top-band rates, the provincial sales tax on premiums in Quebec, Ontario and Saskatchewan, the rule that this tax cannot be added to the loan, and the energy efficiency refund of up to 25%. Accessed 2026-09-06.
  3. Government of SaskatchewanInformation Bulletin PST-73, Insurance Contracts, revised April 2020. Section E names lender's mortgage insurance and mortgage default insurance. Section F separately names creditor protection insurance covering mortgage or loan payments on accident, sickness or disability. Supports the distinction between the two products. Accessed 2026-09-06.
  4. Ontario Ministry of FinanceCalculating land transfer tax. Supports the Ontario rate bands and the 2.5% band applying only to land with one or two single family residences, from which the $8,475 and $5,475 worked figures are calculated. Accessed 2026-09-06.
  5. Ontario Ministry of FinanceLand transfer tax refunds for first-time homebuyers. Supports the maximum refund of $4,000 and the roughly $368,000 point at which the refund stops covering the whole tax. Accessed 2026-09-06.
  6. City of TorontoMunicipal land transfer tax rates and fees. Supports the residential rate bands, their effective date of April 1, 2026, the $102.56 transaction fee and the $221.22 fee for a rebate requested after registration. Accessed 2026-09-06.
  7. City of TorontoMunicipal land transfer tax rebate opportunities. Supports the $4,475 maximum rebate and the eligibility test, including the requirement never to have owned an interest in a home anywhere in the world. Accessed 2026-09-06.
  8. Province of British ColumbiaProperty transfer tax. Supports the 1%, 2% and 3% general rates and the further 2% on residential value above $3,000,000, from which the $118,000 total on a $4,000,000 property is calculated. Accessed 2026-09-06.
  9. CRALine 31270, Home buyers' amount. Supports the $10,000 claim, its non-refundable nature and the four-year test. Page carries a 2025 tax year stamp. Accessed 2026-09-06.
  10. CRAWhat is the Home Buyers' Plan. Supports the $60,000 withdrawal limit and the deferred repayment for first withdrawals made from 2026 to 2028, including the 2026 to 2031 worked case. Accessed 2026-09-06.
  11. CRAGuide RC4028, GST/HST new housing rebate. Supports the first-time home buyers' rebate of 100% below $1,000,000 tapering to nil at $1,500,000, its construction and first-time conditions, the Ontario first-time rebate on the same eligibility conditions and its cap at the lesser of $80,000 and the provincial part payable, the 90% test for a substantial renovation, and the rebates applying to new and substantially renovated homes only. Accessed 2026-09-06.
  12. Justice LawsExcise Tax Act, Schedule V, Part I, section 2, Exempt Supplies. Supports that a sale of a residential complex by a person who is not a builder is exempt, and the carve-out that makes a sale by a substantial renovator taxable. Act current to 2026-06-21. Accessed 2026-09-06.

Educational, not financial advice. Figures verified against primary sources on the date shown.

See it in a story: "Sinking Funds," where Maya starts saving for costs she knows are coming. If you're still building the cash, saving for a goal by a date works out the monthly number, and where to hold an emergency fund covers where to park money you'll need on a known day. Or browse the whole budgeting hub.

See it in a story

Sinking Funds — Where the Money Goes

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Saving for Goals by Date: the Simple Math