Buying your first home in Toronto can feel overwhelming. Especially when the headlines keep shouting about million-dollar price tags. But when you break the process into clear steps, the
path becomes far more manageable. Whether you’re dreaming of a downtown condo or a starter
home away from the downtown hustle and bustle, understanding the rules, the savings tools, and
the income requirements puts you firmly in control.
This month, we are unpacking what it actually takes to buy a $1M property in 2026 without
drowning you in numbers. We’ll start with the big picture, then move into the math for those
who want the full breakdown.
The Big Picture: What First-Time Buyers Need to Know
The rules for buying with less than 20% down haven’t changed much, and that’s good news. You
can still purchase with under 20% down as long as you qualify for CMHC insurance. That insurance allows you to borrow more. While it comes with a fee, it also opens the door for many first-time buyers who don’t have $200K saved.
The real challenge for most buyers isn’t the rules. It’s the down payment. And that’s where today’s savings tools shine.
The First Home Savings Account (FHSA) and the RRSP Home Buyers’ Plan (HBP) are game-changers. They let you build your down payment faster, reduce your taxes, and — when combined — unlock tens of thousands of dollars you may not have realized you could access. Couples can double their power, and even solo buyers can make meaningful progress in just a few years.
On the qualification side, lenders look at your whole financial picture: income, debts, condo fees,
taxes, and interest rates. Many buyers are surprised to learn they’re closer to qualifying than they
expected.
And remember: you don’t have to do this alone. Co-buying, family gifts, and strategic planning
can all help you get into the market sooner.
The Numbers: Your 2026 Breakdown
Minimum Down Payment on a $1M Home
Canada’s tiered system applies:
5% on the first $500,000
10% on the next $500,000
Minimum down payment: $75,000 (7.5%)
Anything under 20% requires CMHC insurance.
CMHC Insurance Premiums
Premiums depend on your down payment percentage:
Down Payment % Premium Rate Cost on $925K Mortgage
5–9.99% = 4.00% = $37,000
10–14.99% = 3.10% = $28,700
15–19.99% = 2.80% = $25,900
At the minimum down payment, your mortgage becomes roughly $962,000 once the premium is
added.
Income Needed to Qualify
Lenders stress-test you at the higher of:
your contract rate + 2%, or
the federal benchmark (typically 5.25–6%)
For a $962K mortgage over 25 years:
Estimated monthly payment: ~$5,700 (stress-tested)
Minimum household income: ~$180K+ with low debt
At a 5.5% contract rate, payments drop slightly (~$5,300), and income needs fall to roughly
$165K+.
More debt = higher income required!
FHSA: Your Fastest Down Payment Builder
Contribute $8,000/year, up to $40,000 total per person
Contributions are tax-deductible
Withdrawals for your first home are tax-free
Couples can combine for $80,000, plus investment growth
RRSP Home Buyers’ Plan (HBP)
Withdraw up to $60,000 per person tax-free
Couples: $120,000 combined
Repay over 15 years
Pro tip: contribute first, get a tax refund, then withdraw — double benefit
FHSA + HBP = up to $100,000 per person toward your down payment.
Other Down Payment Sources
Family gifts: unlimited, must be non-repayable
TFSA or savings: unlimited
Co-buying: share down payment + income to qualify
No borrowed down payments: CMHC does not allow debt-funded down payments
Your 5-Step Action Plan
1. Add up your FHSA room + RRSP balances
2. Stress-test your income using Canada.ca’s calculator
3. Open and fund your FHSA
4. Get pre-approved to lock in a rate
5. Start your search. There are great GTA options under $1M. Reach out and we will show
you.