Buying a home in the Greater Toronto Area (GTA) has always been a significant financial milestone, and in 2025, the stakes remain high as property prices continue to rise. For many homebuyers, especially first-timers, the down payment is one of the most critical—and daunting—parts of the home-buying process. 

Preparing for this expense requires strategic planning, disciplined saving, and knowledge of available resources. Recent mortgage rule changes, such as the expanded insured mortgage cap of $1.5 million and eligibility for 30-year amortizations, make homeownership more accessible. This guide will help you navigate these changes while preparing your down payment in 2025

Understanding Down Payments: The Basics

A down payment is the initial amount you pay towards the purchase price of a home, with the remaining balance covered by a mortgage. In Canada, the minimum down payment is determined by the home’s price:

• 5% for homes up to $500,000.
• 10% for the portion of the price between $500,000 and $1,500,000.
• 20% for homes priced over $1,500,000.

For example, if you’re purchasing a $900,000 home, your minimum down payment would be $65,000 (5% on the first $500,000 and 10% on the remaining $400,000). If the home’s price exceeds $1,500,000, you’d need to put down at least 20% to avoid CMHC mortgage default insurance. With the increased insured mortgage cap of $1.5 million, buyers can now secure high loan-to-value mortgage insurance for homes priced up to this limit. For a $1.5-million home, the minimum down payment is $125,000, a significant reduction compared to uninsured options.

First-time buyers can now benefit from 30-year amortizations, reducing monthly payments and making higher-priced homes more accessible

Understanding these requirements is essential, as a higher down payment can save you money in the long run by reducing your mortgage principal, monthly payments, and interest costs.

How Much Should You Save in 2025?

The amount you need for a down payment depends on the price of the home you’re buying and the mortgage terms you qualify for. With the GTA’s average home price hovering near $1,100,000 in 2025, many buyers will need to save 20% or more to meet minimum requirements.

Consider this example:

• For a $900,000 home: Minimum down payment = $65,000.
• For a $1,100,000 home: Minimum down payment = $220,000.
• Under the new rules, purchasing a $1.5-million home requires a $125,000 down payment, compared to the previous $300,000 for uninsured mortgages. This opens new opportunities for buyers to enter high-demand markets.

In addition to the down payment, buyers should budget for closing costs, which typically range from 1.5% to 4% of the purchase price. These include legal fees, land transfer taxes, and home inspections.

Setting a clear savings goal, including both your down payment and closing costs, will help you prepare effectively for homeownership.

Practical Strategies for Saving Your Down Payment

Saving for a down payment requires commitment, but with the right strategies, it’s entirely achievable. Here are some practical tips to help you build your savings:

1. Automate Your Savings: Set up a dedicated savings account and schedule automatic contributions to keep your goal on track.
2. Cut Back on Unnecessary Expenses: Review your budget and eliminate non-essential spending, such as dining out or subscription services. Redirect those funds into your down payment account.
3. Leverage High-Interest Savings Accounts: Use accounts or GICs with higher interest rates to grow your savings faster.
4. Consider Low-Risk Investments: If your timeline allows, invest in conservative options like ETFs or mutual funds to earn higher returns.
5. Sell Unused Items: Declutter your home and sell items you no longer need to add extra cash to your savings.

The key is consistency. Small, regular contributions can add up quickly, bringing you closer to your goal.

Government Programs to Help GTA Homebuyers in 2025

Several government programs are designed to make homeownership more accessible for buyers, especially first-timers.

1. First-Time Home Buyer Incentive: This program allows eligible buyers to receive a shared equity loan of up to 10% of the home’s purchase price, reducing their mortgage payments. 
2. First Home Savings Account (FHSA): With the FHSA, buyers can save up to $40,000 tax-free toward their down payment. Combined with lower down payment requirements under the new insured mortgage rules, this program significantly boosts buying power for first-time buyer.
3. Home Buyers’ Plan (HBP): Use your RRSP savings to contribute up to $35,000 towards your down payment, interest-free, with repayment required over 15 years.
4. Land Transfer Tax Rebates: First-time buyers in Ontario can receive rebates of up to $4,000 to offset the provincial land transfer tax. GTA buyers purchasing in Toronto can also access additional rebates for the municipal land transfer tax.

These programs can provide much-needed relief. Also, first-time homebuyers can now benefit from extended amortization periods of up to 30 years on insured mortgages. This reduces monthly payments allowing buyers to stretch their savings further and reduce upfront costs.

Overcoming Challenges in Saving a Down Payment

Saving a down payment in the GTA isn’t without its challenges. Rising home prices, rent payments, and other financial obligations can make it difficult to set aside enough money. Here’s how to tackle some common obstacles:

• Rising Home Prices: Consider starting with a smaller property, such as a condo, to enter the market sooner.
• Balancing Rent and Savings: Create a detailed budget and prioritize savings wherever possible. If feasible, explore options to reduce rent costs, such as sharing accommodations.
• Unexpected Expenses: Build an emergency fund to ensure that unexpected costs don’t derail your savings plan.

Staying flexible and adapting to challenges will help you stay on track towards your goal.

How Justo Makes Home Buying Easier in 2025

At Justo, we understand the challenges of saving for a down payment, especially in a competitive market like the GTA. That’s why we offer services and incentives designed to make the home-buying process more affordable.

Cashback Incentive: For buyers, our cashback program provides a financial boost. For example, purchasing a $900,000 home through Justo could earn you approximately $8,250 in cashback—funds that can be used to offset your down payment or cover closing costs. To see exactly how much cashback you’ll receive, visit Justo.ca and use our cashback calculator.

Expert Guidance: Our team of professional agents is here to help you navigate the financial complexities of buying a home. From understanding your budget to identifying government programs you may qualify for, Justo ensures you’re informed and confident every step of the way.

By working with Justo, you can turn your homeownership goals into reality while saving money and reducing stress.

Making Informed Decisions in 2025

Preparing for a down payment is one of the most important steps in buying a home, especially in the high-demand GTA market. By understanding the requirements, setting realistic goals, and leveraging available resources, you can position yourself for success.

With Justo by your side, the process becomes more manageable. Our cashback incentive, expert advice, and personalized support make us a trusted partner for GTA homebuyers in 2025. Whether you’re just starting to save or ready to make a purchase, we’re here to help you every step of the way.

Don’t wait. Your dream home is within reach—take advantage of the new mortgage rules and Justo’s exclusive benefits. Contact us today to start your home-buying journey in 2025.