For homes under $500,000, 5% is the minimum. For homes between $500,000 and $1.5 million, it is 5% on the first $500k and 10% on the remainder. For properties over $1.5 million, a 20% down payment is required.

Yes, for long-term buyers, 2026 is considered a “rare window” of opportunity. While affordability is still a challenge, prices have softened from their peaks (especially in condos) and inventory is high, giving buyers more negotiating power and time to make decisions, rather than being forced by FOMO.

Based on recent data from Toronto law firms, pricing structures can vary, but here is a breakdown of typical costs:

Average Legal Fees: For a standard home purchase, professional legal fees typically range between $1,200 and $2,000.

Flat-Rate Options: Some law firms provide transparent, flat-rate legal fees that start at around $999 plus HST.

Complex Transactions: If your real estate deal is complicated, total legal fees can increase to as much as $3,000.

Don’t Forget “Disbursements”: When budgeting your cash-to-close, remember that the legal fees mentioned above usually do not include disbursements. Disbursements are third-party, out-of-pocket expenses your lawyer pays on your behalf (such as title search fees, software costs, and registration fees). You should expect to add another $400 to $600 to your total bill to cover these costs.

When you decide to make an offer on a home in Toronto, here is what you can expect regarding the standard deposit requirements:

The Standard Amount: In the 2026 market, it is the standard expectation for buyers to offer a deposit equal to 5% of the purchase price.

Timeline and Method: You will need to have liquid cash available, as the deposit must be provided via a bank draft within 24 hours of the offer’s acceptance.

If you are a home buyer in Ontario working to fulfill your financing condition, here is what you need to know about the mortgage stress test rules in the 2026 market:

The Stress Test Formula
To ensure you can still afford your payments if interest rates rise, all federally regulated lenders (such as major banks) require you to qualify for your mortgage at a higher interest rate than the one you actually pay. You must qualify at whichever of the following is higher:

• Your contracted mortgage rate plus 2%
• The minimum benchmark floor rate of 5.25%

Given that most fixed mortgage rates in 2026 are well above 3.25%, the “contract rate plus 2%” side of the formula is what applies to nearly all home buyers today. For example, if you secure a 4.5% fixed rate, you must prove your finances can handle a mortgage calculated at 6.5%.

How It Impacts Your Purchase

Reduced Borrowing Power: Lenders use this higher stress-tested rate to calculate your debt service ratios (Gross Debt Service and Total Debt Service). Because the simulated monthly payment is higher, it directly reduces the maximum loan amount you are approved to borrow.

Exemptions at Renewal: The stress test primarily applies when you are taking out a new mortgage or refinancing. If you are renewing your mortgage and staying with your current lender, you do not need to pass the stress test again. Additionally, under the latest OSFI guidelines, if you make a “straight switch” to a new federally regulated lender at renewal—meaning you do not increase your loan amount or extend your amortization period—you are completely exempt from the stress test.

In Ontario, what happens to your deposit if your financing falls through depends entirely on whether your Agreement of Purchase and Sale included a financing condition (making it a conditional offer) or if it was a firm offer.

Here is what you can expect in either scenario:

1. If You Have a Financing Condition (Conditional Offer)
If your offer was contingent on securing a mortgage and your financing falls through during the conditional period, you are legally protected.

Deposit Returned: You are typically entitled to get your full deposit back without penalty.

Deal Becomes Void: You or your agent will provide formal notice that you cannot fulfill the condition, and the agreement becomes null and void. Neither party is legally obligated to proceed.

2. If You Made a Firm Offer (Or Financing Fails After Waiving Conditions)
If you submitted a firm offer (meaning you waived the financing condition to be more competitive) or if your financing unexpectedly falls through weeks before closing after you already fulfilled your conditions, you are legally bound to complete the purchase. Failing to close is a breach of contract, which carries severe consequences:

Loss of Deposit: You will almost certainly forfeit your deposit. In Ontario, courts treat real estate deposits as true deposits (a gesture of good faith) rather than just partial payments, meaning the seller usually gets to keep it if you walk away.

Sued for Damages: The seller can sue you for breach of contract. Most notably, if the seller is forced to relist the property and sells it for a lower price than what you agreed to pay, they can sue you for the “appraisal gap” (the difference in price), as well as their carrying costs, additional real estate commissions, and legal fees.

Important: The “Mutual Release” Process
It is important to note that deposits are held in a secure trust account (usually by the listing brokerage or a real estate lawyer). Under Ontario law, funds held in trust cannot be unilaterally released.

Even if your deal falls through during a valid conditional period, the funds cannot be released until both the buyer and the seller sign a Mutual Release document. This document formally releases both parties from liability. If the seller refuses to sign it out of frustration or a dispute arises, the deposit remains frozen in the trust account until the dispute is resolved or a court orders its release.

Disclaimer: Real estate contracts are legally binding. If you are at risk of your financing falling through, you should communicate with your real estate agent, mortgage broker, and real estate lawyer immediately to review your options.