One of the most common questions I get from first-time buyers is this:
Can you actually buy your first home in Ontario with just 5% down?
The short answer is yes.
But the real answer is a bit more nuanced.
And that nuance is where most people get confused — or discouraged — too early.
THE BIG MYTH
A lot of people believe you need 20% down to buy a home.
That’s not true.
You only need 20% if:
- The price is one million dollars or more
- Or you want to avoid mortgage insurance
For most first-time buyers, especially condos and entry-level homes,
20% is not required.
HOW THE 5% RULE ACTUALLY WORKS
Here’s how down payments work in Canada.
You need:
- 5% on the first $500,000
- 10% on anything between $500,000 and $999,999
That’s it.
So yes — 5% is real.
But it applies in a very specific way.
Let me show you what this looks like with real numbers.
EXAMPLE #1 – CONDO AROUND $550,000
Let’s say you’re buying a condo for $550,000.
Your down payment looks like this:
5% of the first $500,000.
That’s $25,000.
10% of the remaining $50,000.
That’s $5,000.
So your total down payment is $30,000.
Most people are surprised by that.
Now add closing costs:
- Land transfer tax
- Legal fees
- Adjustments
Realistically, you’re looking at around $40,000 to $45,000 total cash needed.
From a savings perspective, this is very doable for many buyers.
But here’s the important part.
DOWN PAYMENT IS NOT THE REAL PROBLEM
Most first-time buyers don’t fail because of the down payment.
They fail because of monthly affordability.
With a condo like this, you still have:
- Mortgage payments
- Condo fees
- Property tax
- Insurance
That monthly number often lands around $3,200 to $3,600.
This is where income, debt, and credit matter far more than savings.
EXAMPLE #2 – TOWNHOUSE AROUND $700,000
Now let’s look at a townhouse for $700,000.
Down payment:
- 5% on the first $500,000 = $25,000
- 10% on the remaining $200,000 = $20,000
Total down payment: $45,000.
Again — technically possible.
But your monthly cost now may be closer to $4,200 to $4,800.
This is where a lot of buyers say:
“I have the down payment, but the numbers don’t work.”
And that’s not failure.
That’s clarity.
THE RIGHT QUESTION TO ASK
The real question isn’t:
“Can I buy with 5% down?”
The real question is:
At what price does 5% still make sense for my income?
That answer is different for everyone.
And that’s why online calculators often mislead people.
FIRST-TIME BUYER CLARIFICATION
One quick clarification.
You can still be considered a first-time buyer even if:
- You owned a property before
- But you didn’t live in it in the last four years
This matters for incentives and planning.
CLOSE + CTA
So yes — buying with 5% down in Ontario is absolutely possible.
But only when the numbers make sense monthly.
The buyers who succeed aren’t the ones with the biggest savings.
They’re the ones who understand their limits before they shop.
