To buy a house in Ontario, you typically need at least 5% of the purchase price as a down payment, closing costs ranging from 1.5% to 4% of the price, and ongoing expenses such as property tax and mortgage payments. For a $750,000 home, budget approximately $60,000 upfront.

Buying a house in Ontario requires understanding a variety of costs, from down payments to closing fees and ongoing property expenses. With fluctuating housing prices and financial incentives for first-time buyers, navigating the market effectively demands proper budgeting and financial planning. Below, we provide deeper insights into the main costs of homeownership and answer frequently asked questions about buying a house in Ontario in 2025.

What's The Average Price of a House in Ontario?

The average house price in Ontario in 2024 was approximately $850,000, reflecting a moderate increase in housing demand and limited inventory in major cities. Prices vary significantly by region, with urban areas like Toronto and Ottawa tending to skew higher than smaller towns or rural regions.

What's The Average Price of a House in Toronto?

Toronto remains one of the priciest housing markets in Canada, with the average home price hovering around $1.1 million in 2024. Detached homes and properties in prime neighborhoods contribute to this high average, while condos and townhouses offer more affordable options for buyers entering the market.

How Much Do You Need for a Down Payment?

The minimum down payment is based on the purchase price:

• 5% for homes priced up to $500,000.
• 10% for the portion of the price between $500,000 and $999,999.
• 20% for homes priced at $1 million or more.

For a $750,000 home:

5% of $500,000 = $25,000.

10% of $250,000 = $25,000.

Total down payment: $50,000.

What Are The Closing Costs For Buying a House?

Closing costs for a house in Ontario typically range from 1.5% to 4% of the purchase price. For a $750,000 home, expect to pay between $11,250 and $30,000. These costs include:

• Land transfer tax
• Legal fees
• Title insurance
• Home inspection fees
• Potential adjustment fees

For a $750,000 home:

2% closing cost estimate = $15,000.

Total upfront cost (down payment + closing costs) = $50,000 + $15,000 = $65,000.

Minimum Income to Buy a House in Canada

The minimum income required to buy a house depends on the purchase price, mortgage interest rates, and the borrower's existing debt load. For a $750,000 home with a 20% down payment and a 5% interest rate, you’ll need an annual household income of around $150,000 to $160,000 to qualify for a mortgage. Lenders consider factors such as debt-service ratios and existing obligations.

Government Incentives for First-Time Homebuyers

First-Time Home Buyer Incentive:

A shared equity program offering 5% or 10% of the purchase price for eligible homes.

Home Buyers’ Plan (HBP):

Withdraw up to $35,000 tax-free from RRSPs.

Land Transfer Tax Rebate:

Up to $4,000 refund on provincial land transfer tax.

Tax-Free First Home Savings Account (FHSA):

Contribute up to $8,000 annually, with a lifetime limit of $40,000, for tax-free home savings.

How Much Is The Land Transfer Tax in Ontario?

The provincial land transfer tax is calculated as follows:

• 0.5% on the first $55,000.
• 1% on $55,001 to $250,000.
• 1.5% on $250,001 to $400,000.
• 2% on $400,001 to $2,000,000.
• 2.5% on amounts above $2,000,000.

For a $750,000 home, the tax is approximately $11,475.

0.5% of $55,000 = $275.

1% of $195,000 = $1,950.

1.5% of $150,000 = $2,250.

2% of $350,000 = $7,000.

Total: $11,475.

How Much Is The Property Tax in Ontario?

Property tax rates vary by municipality and average 1% of the home’s assessed value annually. For a $750,000 home, property taxes would be around $7,500 per year. Cities like Toronto and Ottawa may have slightly lower rates compared to smaller towns.

Additional Costs For Buying a House in Ontario

Mortgage Default Insurance:

Required for down payments less than 20%, with premiums ranging from 2.8% to 4% of the mortgage amount. For a $600,000 mortgage with a 10% down payment, expect to pay around $21,000 in insurance premiums.

Home Maintenance Costs:

Budget around 1% of the home’s value annually for maintenance. For a $750,000 home, this amounts to $7,500 per year.

Utility Costs:

Monthly utilities, including heating, electricity, and water, typically range from $300 to $500, depending on the size and location of the home.

Real Estate Agent Fees:

For sellers, commission fees are around 5% of the sale price. Buyers typically don’t pay agent fees directly.

Is It Better to Rent or Buy a House in Ontario in 2025?

This depends on your financial situation. For example, renting a two-bedroom in Toronto might cost $3,000 per month ($36,000 per year), while buying a $750,000 condo with a 20% down payment might have monthly mortgage payments of $3,200 at 5% interest. The long-term equity from owning often outweighs renting costs over 10+ years.

Regional Trends in Ontario’s Housing Market

Housing markets in smaller cities like London, Windsor, and Kingston are more affordable, with average prices between $500,000 and $650,000. These regions are increasingly popular among remote workers and first-time buyers seeking lower costs compared to Toronto or Ottawa.

Buying a House in Ontario

Navigating the Ontario housing market in 2025 requires sound planning planning and a clear understanding of the costs involved. From saving for a down payment to budgeting for closing fees and ongoing expenses, preparation is key to achieving homeownership. Take advantage of government incentives like the First-Time Home Buyer Incentive or the Tax-Free First Home Savings Account to ease the financial burden. Remember that affordability varies widely by region, with smaller cities offering lower entry points compared to Toronto or Ottawa. Rising interest rates highlight the importance of locking in favorable mortgage terms and ensuring your budget can handle potential increases in costs.

Whether you’re a first-time buyer or looking to upgrade, consulting with a mortgage professional ensures you make informed decisions tailored to your financial goals. Let us guide you through the process and help you on your journey to homeownership.