Learning Centre — mortgage guides in plain language

Your minimum down payment in Canada depends on the purchase price. As a general rule, homes priced lower require 5% down, mid-range prices step up to 5% on the first portion and 10% on the amount above a set threshold, and homes at the higher end require 20% or more. Under 20% down means default insurance (through CMHC or a private insurer) is added, which lets you buy sooner with a smaller down payment.

Two figures often get confused. The deposit is the cheque you provide when your offer is accepted — it shows good faith and is held in trust. The down payment is the total cash you put toward the purchase price at closing, and your deposit counts toward it. The rest of the price is covered by your mortgage.

When you apply, lenders review your income and how stable it is, your existing debts, your credit history, and the property itself. First-time buyer incentives and rebates exist at a high level, but eligibility and amounts change — treat this as a starting point and confirm what currently applies.

If you're buying a newly built home or condo in Vaughan, Tarion administers Ontario's new-home warranty program. Builders are required to enrol eligible homes, and the warranty gives you coverage against certain defects — typically starting with items reported shortly after possession and extending, at reducing levels, over the years that follow.

Tarion also provides deposit protection up to program limits, which matters on pre-construction purchases where you pay deposits long before the home is finished. Before you take possession you'll complete a pre-delivery inspection (PDI) — a walkthrough where you and the builder document the home's condition and note anything to be addressed.

Coverage details, timelines, and limits are set by the program and can change, so review your enrolment documents and Tarion's current materials for the specifics that apply to your home.

A firm closing date is a fixed calendar day when ownership transfers and your mortgage funds. A tentative date, common on pre-construction homes, is an estimate the builder may push back as construction progresses — so plan financing with some flexibility.

New builds often involve interim occupancy, where you move in and pay an occupancy fee to the builder before the building formally registers and your mortgage actually starts. Your true closing (and first regular mortgage payment) happens at registration, which can be weeks or months after you move in.

Dates matter for financing because a rate hold only lasts so long. If your closing shifts beyond your hold window, your rate may need to be re-approved at current pricing — worth watching closely on longer-dated new-build purchases.

Beyond your down payment, closing comes with one-time costs. These commonly include your lawyer's legal fees and disbursements, title insurance, an appraisal if the lender requires one, and a statement of adjustments that settles prepaid items like property taxes between you and the seller.

If your down payment is under 20%, the default insurance premium is added to your mortgage — but the PST on that premium is a closing cost you pay up front in Ontario. Land transfer tax is usually the largest single item; it has its own guide below.

As a rough planning figure, budgeting somewhere around 1.5% to 4% of the purchase price for closing costs is a reasonable starting point. Your actual total varies with price, location, and whether Toronto's municipal tax applies, so confirm real numbers with your lawyer.

When you buy property in Ontario you pay provincial land transfer tax, calculated on a sliding scale that rises with the purchase price. It's due at closing and is usually the largest closing-day cost, so build it into your budget from the start.

If the property is in the City of Toronto, an additional municipal land transfer tax applies on top of the provincial one — effectively doubling this cost. Homes in Vaughan and elsewhere in York Region pay the provincial tax only, not the Toronto municipal tax.

First-time buyers may qualify for a rebate that reduces the provincial tax (and a separate Toronto rebate where applicable), lowering what you owe up to a set maximum. Thresholds and rebate amounts can change, so verify current figures. Our calculators can help you estimate the cost for a given price.

Gathering documents early is the fastest way to a smooth approval. Lenders verify who you are, that your income is real and stable, that your down payment comes from an acceptable source, and details about the property you're buying.

For income, salaried applicants typically provide recent pay stubs, a letter of employment, and Notices of Assessment or T1 General returns. Self-employed applicants usually provide two years of business financials, T1s, and Notices of Assessment. For your down payment, expect to show bank statements — and if part of it is a gift from family, a signed gift letter confirming it isn't a loan.

Having clean, complete, up-to-date documents on hand lets your application move quickly when you find the right home.

Your credit score is a snapshot of how you've handled borrowing. The biggest drivers are your payment history — paying on time, every time — and your credit utilization, meaning how much of your available limits you're using. Keeping balances well below your limits generally helps.

Lenders look at your score alongside your full profile, so a strong score supports your application but isn't the only factor. Staying application-ready means paying on time, not maxing out cards, and avoiding opening or closing several accounts right before you apply.

A common myth worth clearing up: checking your own credit doesn't lower your score. Reviewing your own report is a "soft" inquiry. Only lender-initiated "hard" inquiries when you apply for new credit can have a small, temporary effect.

Several programs are designed to help buyers, especially first-timers, build and use a down payment more effectively. The First Home Savings Account (FHSA) lets eligible first-time buyers contribute within annual and lifetime limits, with potential tax advantages when the funds go toward a qualifying home.

The RRSP Home Buyers' Plan (HBP) lets eligible buyers withdraw from their RRSP toward a first home, up to a set limit, and repay it over time. There are also first-time buyer rebates, including on land transfer tax, that reduce upfront costs.

These programs have specific eligibility rules, contribution limits, and deadlines that change from time to time. Use this as an overview and confirm the current details before you count on any one program.

The Bank of Canada sets the policy interest rate (the target for the overnight rate), which influences the cost of borrowing across the economy. When the Bank moves this rate, lenders typically adjust their prime rate in step.

That connection is why variable-rate mortgages, which are priced off prime, move up or down when the policy rate changes. Fixed-rate mortgages work differently — they tend to track government bond yields, which reflect what markets expect for future rates and inflation, so fixed rates can move before the Bank does.

The Bank announces rate decisions on a scheduled basis several times a year. Watching those announcements gives a sense of direction, but no one can predict the exact path — so choose a rate type that fits your comfort with change, not just the latest headline. See current pricing on our rates page.

Vaughan and the wider York Region offer a broad mix of property types — from detached and semi-detached homes and townhouses to a growing supply of condos, particularly around the Vaughan Metropolitan Centre and transit corridors. That variety means very different price points and financing considerations across neighbourhoods.

The area also sees steady new-build activity, so pre-construction purchases, interim occupancy, and Tarion coverage come up often here — topics covered in the guides above. Knowing how these pieces fit together locally can save time and surprises.

This is general local context, not a market forecast. Working with someone who knows Vaughan and York Region helps you weigh property type, timing, and financing against your own situation rather than a headline number. Explore mortgage solutions or walk through the mortgage journey when you're ready.