First-Time Homebuyer Numbers Plunge 22% in Ontario

Young Canadians are tapping out — and stress tests are only part of the story.

Buying your first home in Ontario is starting to feel less like a rite of passage and more like a financial marathon — one many aren’t even attempting.
According to brokers across the province, first-time homebuyer applications are down by an estimated 22% year-over-year, based on lender inquiries, rate pre-approvals, and mortgage submissions through platforms like Filogix and Lendesk.
And the reasons? They’re piling up fast.
Between high down payments, tough mortgage stress tests, and rising fixed rates, young buyers are getting squeezed from every angle. Some are pausing. Others are giving up entirely.

“It’s not just about interest rates anymore,” says one Toronto mortgage agent. “It’s the combo of everything — high home prices, high qualifying income, and no wiggle room.”

The Stress Test is Still a Barrier

Even though the Bank of Canada hasn’t raised its key rate lately, the qualifying rate for insured mortgages remains around 6.84% or higher. That means buyers need to prove they can afford payments at nearly 7% — even if the mortgage rate they get is closer to 5%.
This “what if” test is meant to protect buyers from future hikes. But in today’s stagnant job market, it’s forcing many to qualify for less or delay altogether.

More Are Turning to Family — or Turning Away

As prices stay high in cities like Toronto, Mississauga, and Ottawa, more first-time buyers are either leaning on the Bank of Mom and Dad or leaving the market entirely. Some are eyeing pre-construction units with long closing periods, while others are considering co-buying with friends or siblings just to get in the door.
But many are simply waiting. And that wait could become permanent if affordability doesn’t shift.

“This decline in new buyers comes as mortgage payment deferrals are rising across Ontario and B.C., raising broader concerns about market stability.”