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Truth: buying your first home in Toronto has never been “easy.” But if you’ve been sitting on the sidelines, watching the market, wondering when market conditions might actually work in your favour—2026 just might be your moment.
Prices have softened, inventory is up, new mortgage rules have lowered the barriers to entry and frenzied bidding wars seem like ancient history. That doesn’t mean buying is simple or cheap – it’s still Toronto – but the conditions are more favourable than they’ve been in a LONG time. Maybe the best I’ve since in 18 years selling real estate.
Here’s what you need to know.
Why 2026 Might Be Your Year
While 2026 might be the best time for first-time buyers to get into the real estate market in many years, “best” doesn’t mean “easy”—it means opportunity for those who are prepared.
Remember: you’re not the only one who’s been watching and waiting. A lot of would-be buyers were ready to go in 2024 or 2025 but put their plans on hold—waiting for rates to drop, for prices to stabilize, for the economic picture to clarify. That pent-up demand is still out there. When confidence returns (and it will), those sidelined buyers will re-enter the market. The window of reduced competition won’t last forever.
The case for buying now:
- Prices have softened. The GTA average selling price dropped 4.7% in 2025, with condos down 7.3%. More significantly, average prices are now down roughly 25% (~$328,000) from the February 2022 peak of $1.33 million. That’s real money back in your pocket—or real breathing room in your budget.
- Inventory is at multi-year highs. Nearly 187,000 new listings hit the market in 2025—more choice, less pressure, and far less competition than buyers faced a few years ago.
- New mortgage rules work in your favour. 30-year amortizations are back for all first-time buyers, and the insured mortgage cap jumped from $1 million to $1.5 million. These changes directly lower your monthly payments and expand what you can afford with a smaller down payment.
- Rates have stabilized. Variable rates are hovering around 3.4-3.5%, with 5-year fixed rates around 3.8-4.5% depending on the lender. (I just scored a 4% 5-year fixed rate for my new house.) Not 2020 levels, but a world apart from the 7%+ peak we saw in 2023.
- Sellers are negotiating. Homes sold for an average of 3% below asking in 2025 (a sale-to-list ratio of ~97%), and days on market stretched to 65 days. That’s leverage you can use.
The New Rules That Help You
The federal government made significant changes to mortgage rules in late 2024 that specifically benefit first-time buyers. Here’s the quick version:
30-year amortizations are back. Effective December 15, 2024, all first-time buyers can now get a 30-year amortization on any property type—not just new builds. This lowers your monthly payment by roughly 9-10%, making homeownership more manageable month-to-month (though you’ll pay more interest over the life of the loan).
The insured mortgage cap jumped to $1.5 million. Previously, any home over $1 million required a 20% down payment. Now you can buy up to $1.5 million with as little as 5-10% down. The math: a $1.25 million home now requires $100,000 down (5% on the first $500K, 10% on the rest). Before? That same home needed $250,000 down.
For the full breakdown of what changed,check out our guide to What’s Changed for Toronto Real Estate in 2025-2026.
The Affordability Reality Check
“More affordable” is relative—Toronto is still expensive. Let’s look at actual numbers.
Scenario 1: A $650,000 Condo
| Purchase price | $650,000 |
| Down payment (5%) | $32,500 |
| Mortgage amount (incl. CMHC insurance) | $642,200 |
| Interest rate | 4.5% (5-year fixed) |
| Amortization | 30 years |
| Monthly mortgage payment | ~$3,240 |
| Condo fees (estimated) | ~$600 |
| Property taxes (estimated) | ~$300 |
| Total monthly housing cost | ~$4,140 |
| Approximate qualifying income needed | ~$155,000 household |
Scenario 2: A $1,000,000 Freehold
| Purchase price | $1,000,000 |
| Down payment | $75,000 (5% on first $500K, 10% on remainder) |
| Mortgage amount (incl. CMHC insurance) | $953,675 |
| Interest rate | 4.5% (5-year fixed) |
| Amortization | 30 years |
| Monthly mortgage payment | ~$4,810 |
| Property taxes (estimated) | ~$500 |
| Total monthly housing cost | ~$5,310 |
| Approximate qualifying income needed | ~$190,000 household |
What this means:
- Still challenging, but more achievable than the last few years
- The rent vs. buy math is worth calculating for your specific situation. In some cases, renting and investing the difference still makes sense. In others—especially if you’re paying $3,000+ in rent anyway—owning starts to look more attractive.
For a deeper dive into the mortgage process, pre-approval, and everything else you need to know about buying your first home, see our Complete First-Time Buyer Guide.
Where First-Time Buyers Are Finding Success in 2026
Not all parts of the market are created equal. Here’s where buyers with tighter budgets are actually landing homes.
Condo Sweet Spots
- The $500K-$650K range is always popular with first-time home buyers and with lots of inventory available, you can often negotiate.
- Older buildings with established reserve funds have more predictable maintenance fees and cost less to buy than newer condos, per-square-foot.
- East end value plays. Toronto East—including Leslieville, East York, and Riverdale—was the clear outperformer in 2025, with average prices below central Toronto. Strong transit, community feel, and more realistic price points.
- North York and Etobicoke have a lot of inventory and better value per square foot value if you don’t need to be in the core.
Beyond Condos
If you can stretch your budget or expand your geographic search, there are options beyond condo living:
- 905 townhouses are starting under $700K in areas like Durham Region, which had the most competitive market in the 905 belt in 2025.
- Emerging areas with transit coming. The Eglinton Crosstown (when it finally opens) and future transit expansions are creating opportunities in neighbourhoods that will be more connected soon.
- Semi-detached homes in up-and-coming areas. Neighbourhoods like Oakwood Village, Keelesdale, Fairbank, and East Danforth are seeing sales of move-in-ready freeholds under $1 million.
Your 2026 Negotiating Leverage
Here’s something first-time buyers haven’t really experienced in a decade or more: real negotiating power.
What’s different now:
- Conditions are BACK. Financing conditions, home inspection conditions—you can (and should) use them. The days of waiving everything to win a bidding war are largely over.
- Days on market are up. When a home has been sitting for 60+ days, sellers get motivated. That’s room to negotiate.
- Ask for more. Closing date flexibility, appliances or inclusions that might otherwise be removed—these are all on the table in a buyer’s market.
Pro tip: Take your time, do your due diligence, and don’t let anyone pressure you. A good REALTOR will help you understand when to move quickly on a great opportunity versus when to walk away and wait for something better.
The BREL Bottom Line
2026 is a window—maybe not forever. If you’ve been saving, you’re pre-approved, and you’re ready to commit to staying put for at least 5-7 years, the conditions are better than they’ve been in years. But “better” still requires preparation.
This market rewards buyers who:
- Know their real budget (not just the maximum a bank will lend, but what they can actually afford month-to-month)
- Are pre-approved and ready to act when the right property comes along
- Understand that “perfect” is the enemy of “owned”—your first home doesn’t have to be your forever home
- Work with professionals who know the neighbourhoods and can spot both opportunity and risk
The opportunity is real. The work to get there? That’s on you.
Your next steps:
- Get pre-approved and understand your real budget—not just what a lender will give you, but what makes sense for your life.
- Read our Complete First-Time Buyer Guide for the full process, from mortgage basics to closing day.
- Start exploring neighbourhoods—ideally before you’re under pressure to make an offer.
- Talk to the BREL team about your goals and timeline. We’re here to help you figure out when (and whether) buying makes sense for you.
