How Much Down Payment Do I Need?

The minimum down payment in Canada isn't a single number — it depends on the purchase price of the home. The rules are tiered, and the tiers matter a lot when you're near a breakpoint.

The tiered minimums

Homes up to $500,000 — minimum 5% of the purchase price.
Homes between $500,000 and $1,500,000 — 5% on the first $500,000, plus 10% on the portion above $500,000.
Homes at $1,500,000 or more — minimum 20% of the purchase price, because insured mortgages are not available above this cap.

Example: on an $800,000 home, the minimum down payment is $25,000 (5% of the first $500,000) + $30,000 (10% of the next $300,000) = $55,000, or roughly 6.9%.

The $1.5 million insured mortgage cap

As of December 2024, the price ceiling for an insured mortgage rose from $1 million to $1.5 million. Below that ceiling, you can put less than 20% down and pay mortgage default insurance. At or above $1.5 million, you must put 20% or more down and the mortgage is uninsured.

This matters for buyers in expensive markets: a home priced just under $1.5 million can be purchased with as little as $125,000 down, but a home priced at exactly $1.5 million requires $300,000 down.

CMHC (mortgage default) insurance costs

If you put down less than 20%, your mortgage is insured — typically by CMHC, Sagen, or Canada Guaranty. The premium is added to your mortgage balance, not paid upfront in cash. The rate depends on your loan-to-value ratio:

Up to 65% LTV — 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%

On a $500,000 home with 5% down ($25,000), the insured loan is $475,000 and the premium is roughly $19,000 — added to the mortgage, not paid at closing. You do pay provincial sales tax on the premium at closing in Ontario, Quebec, Saskatchewan, and Manitoba.

Amortization options

Amortization is the total length of time to pay off the mortgage. The standard maximum is 25 years for insured mortgages, but two exceptions now allow 30-year amortizations on insured mortgages:

First-time home buyers, on any eligible property.
Any buyer purchasing a newly built home.

A 30-year amortization lowers your monthly payment and increases how much you can qualify for under the stress test, but you pay more total interest over the life of the loan. Uninsured mortgages (20%+ down) can go up to 30 or even 35 years depending on the lender.

Where the down payment can come from

Your own savings, including a TFSA or non-registered account.
RRSP Home Buyers' Plan — up to $60,000 per person ($120,000 per couple) withdrawn tax-free, repaid over 15 years.
First Home Savings Account (FHSA) — tax-deductible contributions, tax-free withdrawals when used for a first home.
Gifted down payment from an immediate family member, with a signed gift letter confirming the funds don't need to be repaid.

Don't forget closing costs

Beyond the down payment, budget roughly 1.5% to 4% of the purchase pricefor closing costs: land transfer tax (highest in Ontario and BC), legal fees, title insurance, home inspection, and adjustments for property tax or utilities. Lenders will want to see proof you can cover these on top of the down payment.