You’ve been saving for a while, and may even have help from a loving (and generous) family member. But before you start browsing MLS and shopping for your dream home in this ultra competitive Toronto real estate market, it’s important to identify your true budget and get pre-approved.

Just how much money do you need to buy a home in Toronto?

1) How much mortgage can you afford?

That monthly mortgage payment is a combination of loan amount, down payment, interest rate and amortization period. A good rule of thumb when figuring your monthly housing cost is that it should not exceed 32% of your gross monthly family income.

You can estimate your maximum mortgage payment by using’s handy Mortgage Affordability Calculator . Just enter your incomes and expenses, and the calculator will do the rest.

Once you know how much you can afford, you can compare this number to the mortgage payments for specific house prices and downpayment combinations. Simply enter the house price in’s Mortgage Payment Calculator and the monthly mortgage payments and all the peripheral costs (i.e.: Toronto Land Transfer Tax…etc) will be figured out for you.

2) What else?

In addition to the mortgage, there are a few other “one-time” expenses you should be prepared for when buying your home in Toronto. You are going to need cash for your down payment, the Toronto & Ontario land transfer tax, your legal fees, title insurance, and HST on the mortgage insurance. The good news is that you won’t need cash for a home inspection or a bank appraisal because in this competitive market, the vendor usually supplies the home inspection and the banks pay for the appraisal.

No doubt the purchase of your home will be one of, if not THE biggest purchase you will make in your lifetime. The best way to achieve this goal is to educate yourself, ask lot’s of questions and be prepared.

If you have any questions, please feel free to contact me here.