Start with the mortgage, not the listings
Browsing homes before knowing your number is how people fall in love with a price they cannot finance. A full pre-approval, not an online estimate, tells you the purchase price lenders will actually support, what down payment gets you there, and whether anything on your credit needs cleaning up first. It takes one conversation and a handful of documents.
- Two most recent pay stubs and a letter of employment
- Two years of tax returns and notices of assessment
- Ninety days of history on the down payment funds
What a Toronto down payment really looks like
Five percent applies to the first $500,000 of the price and ten percent to the portion above it, up to the insured ceiling. Past that ceiling, or on any property you will not live in, twenty percent is the floor. Gifted funds from immediate family are widely accepted, but the lender wants a signed gift letter and proof the money landed in your account before closing.
The offer, the conditions, and the deposit
In a competitive week, sellers push for firm offers. A financing condition is not a formality: it is the clause that lets you walk away with your deposit if the appraisal comes in short or the lender changes its mind. If you go firm, go firm because your broker has confirmed the file is solid, not because the listing agent asked you to.
Closing costs, in Toronto specifically
Toronto charges land transfer tax twice, provincially and municipally. First-time buyers get a rebate on both, which softens the blow but rarely erases it. Add legal fees, title insurance, an inspection, property tax adjustments, and the provincial sales tax on default insurance. One and a half to four percent of the price, in cash, on top of the down payment.
- Provincial and municipal land transfer tax, both due on closing
- First-time buyer rebates on each, claimed by your lawyer
- Lawyer, title insurance, adjustments, and moving costs
Closing week
Your lawyer receives the mortgage instructions, you sign, you wire the balance of funds, and title transfers. Do not change jobs, finance a car, or open a credit card between approval and closing - lenders re-check. Keep the file quiet for those few weeks and closing day is uneventful, which is exactly what you want it to be.
Frequently asked questions
- How long does the whole process take in Toronto?
- Pre-approval can be done in a day or two. From accepted offer to closing is usually thirty to ninety days, set by the offer itself.
- Does a pre-approval guarantee the mortgage?
- No. It confirms your income, credit and down payment support a price range. The lender still reviews the specific property before funding.
- Can I buy with less than twenty percent down in Toronto?
- Yes, below the insured price ceiling. Default insurance is added to the balance and the Ontario sales tax on the premium is paid at closing.