Moving From a Townhouse to a Detached House in Markham: The Real Cost of the Step

The short answer

Moving from a townhouse to a detached house in Markham costs more than the difference in price. On top of the price gap, you pay land transfer tax on the new home, find a larger down payment and possibly pay mortgage insurance.

The biggest surprise for many move-up buyers is the $1.5 million line. Below it, the minimum down payment is worked out in tiers. At $1.5 million or more it becomes 20% of the whole price. Check where the homes you are watching sit against that line.

Checking current townhouse and detached prices

The Toronto Regional Real Estate Board (TRREB) publishes market reports every month in its Market Watch at trreb.ca. Figures change monthly and vary by property type and neighbourhood, so compare current listings for the specific streets you are considering. Our market reports page links to the latest TRREB releases.

Land transfer tax on the detached home

Ontario land transfer tax is calculated on the value of the consideration for the home you buy, which includes the purchase price. The Ontario rates for agreements made after November 14, 2016 are:

Portion of the price	Rate
Up to and including $55,000	0.5%
Above $55,000 up to and including $250,000	1.0%
Above $250,000 up to and including $400,000	1.5%
Above $400,000	2.0%
Above $2,000,000, where the land has one or two single family residences	2.5%

On an illustrative detached price of $1,380,000, the tax works out like this. This is an example calculation, not a market figure or a quote.

Portion	Tax
First $55,000 at 0.5%	$275
Next $195,000 at 1.0%	$1,950
Next $150,000 at 1.5%	$2,250
Remaining $980,000 at 2.0%	$19,600
Total	$24,075

Our post on land transfer tax in Markham covers who pays it and the first-time buyer refund. To try other prices, use our land transfer tax calculator.

The $1.5 million line and your down payment

The Department of Finance raised the price cap for insured mortgages from $1 million to $1.5 million, effective December 15, 2024. The Financial Consumer Agency of Canada (FCAC) sets out the minimum down payment by price:

• Up to $500,000: 5% of the purchase price
• $500,000 to $1.5 million: 5% of the first $500,000 plus 10% of the portion above $500,000
• $1.5 million or more: 20% of the purchase price

Here is what that means at prices a Markham detached buyer is likely to see. The figures are calculated from the FCAC rules above.

Detached price	Minimum down payment	Share of the price
$1,380,000	$113,000	8.2%
$1,499,000	$124,900	8.3%
$1,500,000	$300,000	20%

Moving the price from $1,499,000 to $1,500,000 raises the minimum down payment by $175,100. For a family weighing two houses either side of that line, this is often the deciding number. Our post on deposits and down payments in Ontario explains how the deposit you pay with an offer fits into this.

Mortgage insurance on the bigger loan

FCAC says that if your down payment is less than 20% of the price, you will typically need to buy mortgage loan insurance. CMHC calculates its premium as a percentage of the loan, based on how much of the price you borrow.

Loan to value	CMHC premium on the total loan
Up to and including 65%	0.60%
65.01% to 75%	1.70%
75.01% to 80%	2.40%
80.01% to 85%	2.80%
85.01% to 90%	3.10%
90.01% to 95%	4.00%

As an illustration, a $1,380,000 purchase with the minimum $113,000 down means a $1,267,000 loan. That is about 91.8% of the price. At 4.00% the premium is $50,680. With $276,000 down, which is 20%, insurance would typically not be needed at all. CMHC notes that premiums in Ontario are subject to provincial sales tax. That tax cannot be added to the loan, so it has to be paid separately.

If your current mortgage is insured, porting it to the new home may change this picture. Our post on porting a mortgage when you move up explains the CMHC rules and the premium credit.

A worked example of the full step

These numbers are made up for illustration. Only the tax and down payment rules come from the sources above.

A family sells a Markham townhouse for $920,000. They owe $450,000 on the mortgage and set aside $45,000 for selling costs, legal fees and moving, all illustrative figures. That leaves $425,000 to put toward a detached house at $1,380,000.

Item	Amount
Detached purchase price	$1,380,000
Equity available from the townhouse	$425,000
Land transfer tax, paid in cash	$24,075
Equity left for the down payment	$400,925
Down payment as a share of the price	29.1%
New mortgage	$979,075

With 29.1% down this purchase is above 20%, so mortgage insurance would typically not apply. The new mortgage is still more than double the old one. The lender will test it against your income. Our guide to the mortgage stress test explains how that works. Other closing costs, such as legal fees and title insurance, also come out of the same equity and are listed in our post on closing costs in Markham.

Amortization and timing questions to raise early

The Department of Finance extended 30 year amortizations on insured mortgages to all first-time home buyers and all buyers of new builds from December 15, 2024. A move-up buyer of a resale detached house is usually neither, so ask your lender which amortization applies to you before you set a budget.

Timing matters too. Buying first and selling second means carrying two homes for a while. Selling first can mean renting in between. Our post on selling first or buying first walks through both paths. It was written for downsizers, but the same trade offs apply when you move up.

What to do before you start looking

1. Ask your lender what you qualify for at your expected down payment and which amortization applies.
2. Get a realistic sale range for your townhouse and list every cost that comes out of the proceeds.
3. Work out your down payment at the prices you are considering and check where they sit against $1.5 million.
4. Add land transfer tax and closing costs to your cash budget, since they are not part of the mortgage.
5. Decide whether to sell first or buy first before you write an offer.
6. Confirm any mortgage, tax or legal question with your mortgage professional, lawyer or accountant.

Our upsizing service page explains how we sequence the sale and the purchase. The buyer services page covers the purchase side. If you would like to run these numbers for your own townhouse and the homes you are watching, contact us.