(833) 924-4929

a
Login

Condo Down Payments in Toronto

From down payment requirements to getting pre-approved for a mortgage, here’s everything you need to know.

By Emily Southey | 9 minute read

Aug 26

Are you wondering how much it costs to buy a condo in Toronto? You’ve come to the right place. Buying any type of home is a major decision, and it’s important to understand exactly how much it will cost, both upfront and down the line. Below, we dive into how much you will need to save for a condo down payment in Toronto.

–

Condo Down Payment Requirements in Toronto

As with any home purchase in Canada, certain down payment requirements must be met. The required down payment largely depends on the purchase price of the property. For those who don’t know, a down payment is the amount of money that a homebuyer must pay upfront when they purchase a home. The down payment amount is then deducted from the total mortgage price of your condo. The remaining balance after deducting the down payment is covered by your mortgage loan and paid in monthly mortgage instalments. Continue reading to learn more about the minimum down payments that must be made for condos in Toronto.

–

The Minimum Down Payment for a Condo in Toronto

Down payments are listed as a percentage of the purchase price. Therefore, down payment amounts vary widely, depending on the price of the home you buy. That said, there are certain rules around minimum down payments for condos. Specifically, homebuyers in Canada are required to put down 5% of the purchase price on condos of $500,000 or less, 10% of the purchase price for condos between $500,000 and $1,000,000, and 20% of the purchase price for condos of $1,000,000 or more. Therefore, if you were to purchase a $1,000,000 condo, you would be required to make a down payment of $200,000. As you can see, minimum down payments in Canada vary between 5% and 20% of the purchase price. Please note that these down payment requirements apply to resale properties only. If you are buying a pre-construction condo, the minimum down payment is typically 20% or more.

“Homebuyers in Canada are required to put down 5% of the purchase price on condos of $500,000 or less, 10% of the purchase price for condos between $500,000 and $1,000,000, and 20% of the purchase price for condos of $1,000,000 or more.”

The Average Down Payment for a Condo in Toronto

The minimum down payment and the average down payment for a condo in Toronto are not one and the same. To understand the average down payment for a condo, we must first look at the average purchase price of a condo in Toronto.

As of 2022, the average condo apartment price in the Greater Toronto Area (GTA) was roughly $790,000. Meanwhile, the average price of a condo in downtown Toronto was closer to $840,000. That said, condo prices vary considerably depending on the size and specific location of the unit.

With these numbers in mind, you can expect your down payment to fall between $30,000 and $130,000 for a condo in the GTA and between $38,000 and $180,000 for a condo in downtown Toronto. Ultimately, the down payment you make will depend on the purchase price and how much mortgage you get approved for.

Before purchasing a condo, we strongly recommend getting pre-approved for a mortgage to help you determine a realistic budget.

–

Mortgage Default Insurance

Another expense prospective homebuyers might need to budget for is mortgage default insurance. Depending on the down payment you make on your new condo, you might be required to purchase mortgage default or mortgage loan insurance. Generally, mortgage lenders require borrowers to take out mortgage default insurance if their down payment amounts to less than 20% of the purchase price. They might also require it if you are self-employed or are buying a house with bad credit. Ultimately, if your mortgage lender requires you to purchase mortgage default insurance, they will likely co-ordinate the purchase on your behalf.

Please note that mortgage loan insurance does not protect you. Rather, it is designed to protect the lender against financial loss in the event that you are unable to pay your mortgage. Further, mortgage default insurance ranges in price. The cost of loan protection is often referred to as an insurance premium. The premium for mortgage loan insurance typically falls between 0.6% and 4.5% of the value you borrow. Therefore, your mortgage loan insurance premium is based on the size of your down payment, and the higher your down payment amount, the lower your mortgage rates and therefore your mortgage insurance premium.

Tips on Saving for a Condo Down Payment

Saving up for a condo down payment doesn’t have to be a pain. Follow the tips below if you’re trying to save enough money for a down payment on a condo in Toronto.

–

1. Boost Your Credit Score Before Applying for a Mortgage

Your credit score directly impacts your mortgage rates and the size of your mortgage loan. Therefore, if you currently have bad or mediocre credit, we recommend doing all that you can to boost it before applying for a mortgage loan. Ways to boost your credit score include keeping your credit utilization under 30%, paying your bills on time and in full, and not applying for lots of credit in a short period of time.

–

2. Research and Compare Mortgage Lenders

Another tip to help you save for a condo down payment is to research and compare mortgage lenders before applying for a loan. Many lenders offer mortgage loans, ranging from banks to credit unions. Apply for mortgage pre-approval with several lenders before formally applying for a loan. This way, you can make sure you’re choosing the mortgage loan with the most advantageous interest rates and terms.

–

3. Do Not Max Out Your Budget

We urge you to avoid maxing out your mortgage budget. Just because you get pre-approved for a certain amount doesn’t mean you should spend it. If you want greater financial flexibility down the line, set a realistic budget and stick to it. This will help you afford your down payment and choose a home that doesn’t leave you strapped for cash.

We put the real back in real estate.

Join Wahi today and find out how easy it is to get real estate in the GTA.

GET STARTED

Frequently Asked Questions

How Much Does It Cost to Buy a Condo Apartment In Toronto?

The average price of a condo apartment in the GTA is roughly $790,000 in 2022. However, the market is constantly fluctuating and purchase prices vary depending on size and location.

What Is the Minimum Down Payment Needed for a Toronto Condo?

The minimum down payment needed for a condo in Toronto (or anywhere in Canada for that matter) is as follows:  

  • 5% for condos priced at $500,000 or less;

  • 5% on the first $500,000 and 10% on the remaining balance for condos priced between $500,000 and $1,000,000;

  • 20% for condos priced at $1,000,000 or more.

How Much Is a Good Down Payment?

The amount of money you will need to save for your condo down payment depends on the price of the condo you wish to purchase. The purchase price determines the down payment percentage and amount. For example, if you buy a $1,000,000 condo in Toronto, you are required to make a down payment of 20%, which translates to $200,000. If you aren’t sure what you can afford to spend on a down payment, speak with a mortgage lender or broker and get pre-approved for a mortgage. 

Do First-Time Buyers Get Benefits for Buying a Condo?

Yes, many federal, provincial, and municipal first-time homebuyer assistance programs, such as the First-Time Home Buyers’ Tax Credit, including condominium units as a type of qualifying home. 

Will the Amount of My Down Payment Affect the Type of Mortgage I Can Get?

Yes, the amount of your down payment can impact the type of mortgage you qualify for. Typically, the larger your down payment, the lower your interest rate. This will translate to smaller monthly mortgage payments.

Where Do I Get the Downpayment for a Toronto Condo?

If you’re wondering where you can get the money for a condo down payment in Toronto, you’re not alone. Some of the most common sources of condo down payments are as follows: 

 

  • Personal Savings: Your personal savings account is the first and most common source for a condo down payment in Toronto. Do what you can to grow your savings in the years leading up to buying a condo. If you don’t have enough in your savings account, you might consider liquifying other assets, such as stock market investments currently sitting in your Tax-Free Savings Account. Freeing up some of this money and putting it toward a sound investment, such as a new condo or home, might make more financial sense than leaving it where it is. Plus, it might be the difference between you having enough money for a condo down payment in Toronto and you being forced to continue renting. 

     

  • The Home Buyers’ Plan (HBP): Another source homebuyers can rely on to make a down payment on a condo in Toronto is the federal government’s Home Buyers’ Plan (HBP). This plan allows you to use an RRSP to buy a home. Specifically, it allows eligible homebuyers to use up to $35,000 of their RRSP savings toward a condo down payment. Even better, if you are buying a condo with your partner and you are both eligible for the HBP, you can each take advantage of it, equalling $70,000 in total that you can put toward a down payment. Another perk of the HBP is that the money you withdraw from your RRSP is entirely tax-free if the amount withdrawn is paid back on time. Buyers have 15 years to pay back the funds from the date of withdrawal. Please note that the HBP is only available to eligible homebuyers. You must meet the following criteria to be eligible for the Home Buyers’ Plan: 

     

    • The RRSP funds you borrow must have been in your account for a minimum of 90 days before withdrawal;

    • You cannot have owned a home in the last four years;

    • If you’re buying a home with a spouse or common-law partner who is not a first-time homebuyer, you cannot have lived in a house that they owned for more than four years;

    • You must have entered into a written agreement to buy or build a qualifying home;

    • You must plan to live in the home you purchase within one year of buying it, and it must be your principal residence;

    • You must be a repeat buyer who is buying or building a home for a relative with a disability;

    • You must have a written agreement to buy or build a home for yourself or a relative with a disability;

    • If you have used the Home Buyers’ Plan before, you cannot have any outstanding balance due;

    • You must withdraw the money from your RRSP within 30 days of taking title of the property; and

    • You must be a resident of Canada.

       

  • Family: To be able to afford a down payment on a condo in Toronto, some homebuyers turn to family members, such as their parents, for financial support. Older parents who own and have paid off their homes might now be in a position to help their adult children with a down payment.

Am I Required to Purchase Mortgage Loan Insurance?

Your mortgage lender may require you to purchase mortgage loan insurance if your down payment is less than 20%. 

Emily Southey

Wahi Writer

You might also like

Wahi

Get so in the Know

On everything real estate.

From the latest Canadian housing market trends and stories, to insider tips and tricks.

By clicking “subscribe”, you agree to receive emails from Wahi. You always have the option to unsubscribe at any time, see our privacy policy for more details.