A down payment is calculated as a percentage of the home price. Understanding the minimum down payment required and how your down payment size impacts mortgage insurance premiums is critical for budgeting your home purchase in Canada.
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What is the minimum down payment in Canada?
The minimum down payment in Canada is determined by the purchase price of the home. There are three brackets:
| Purchase Price | Minimum Down Payment |
|---|---|
| $500,000 or less | 5% of purchase price |
| $500,001 to $1,499,999 | 5% on first $500,000 + 10% on remainder |
| $1,500,000 or more | 20% of purchase price |
Minimum down payment examples
Here is what the minimum down payment looks like for common home prices across Canada:
| Home Price | Minimum Down Payment | Percentage |
|---|---|---|
| $300,000 | $15,000 | 5.0% |
| $400,000 | $20,000 | 5.0% |
| $500,000 | $25,000 | 5.0% |
| $600,000 | $35,000 | 5.8% |
| $700,000 | $45,000 | 6.4% |
| $800,000 | $55,000 | 6.9% |
| $1,000,000 | $75,000 | 7.5% |
| $1,200,000 | $95,000 | 7.9% |
| $1,500,000 | $300,000 | 20.0% |
Notice how the effective minimum percentage increases for homes over $500,000. At $1,500,000 the minimum jumps to 20% because the two-tier system no longer applies.
Worked example: down payment on an Ontario home
As of early 2025 the average home price in Ontario is approximately $868,000. What is the minimum down payment?
The Ontario average falls in the $500,001-$1,499,999 bracket:
- First $500,000 × 5% = $25,000
- Remaining $368,000 × 10% = $36,800
- Total minimum down payment = $61,800 (approximately 7.1%)
Use the Ontario mortgage affordability calculator to see how much home you can afford on your income, or the mortgage payment calculator to estimate your monthly payment.
How your down payment affects mortgage insurance
When your down payment is less than 20%, your mortgage is classified as high-ratio and you must pay mortgage default insurance from CMHC, Sagen, or Canada Guaranty. The insurance premium is a percentage of the mortgage amount (not the home price) and is typically added to your mortgage balance.
Standard mortgage insurance rates (25-year amortization)
| Down Payment | Insurance Premium |
|---|---|
| 5.00% - 9.99% | 4.00% |
| 10.00% - 14.99% | 3.10% |
| 15.00% - 19.99% | 2.80% |
| 20.00% or more | 0.00% |
30-year amortization insurance rates (first-time buyers / new builds)
As of December 15, 2024, first-time homebuyers and those purchasing newly constructed homes can extend their amortization to 30 years. An additional 20 basis points is added to the insurance premium:
| Down Payment | Insurance Premium (30-year) |
|---|---|
| 5.00% - 9.99% | 4.20% |
| 10.00% - 14.99% | 3.30% |
| 15.00% - 19.99% | 3.00% |
| 20.00% or more | 0.00% |
Insurance cost examples
Here is what mortgage insurance adds to your total cost on a $500,000 home:
| Down Payment | Mortgage Amount | Insurance Rate | Insurance Cost | Total Mortgage |
|---|---|---|---|---|
| 5% ($25,000) | $475,000 | 4.00% | $19,000 | $494,000 |
| 10% ($50,000) | $450,000 | 3.10% | $13,950 | $463,950 |
| 15% ($75,000) | $425,000 | 2.80% | $11,900 | $436,900 |
| 20% ($100,000) | $400,000 | 0.00% | $0 | $400,000 |
The difference between a 5% and 20% down payment on a $500,000 home means paying $19,000 in insurance — but also needing $75,000 less for the down payment. Use the mortgage insurance calculator for your specific scenario.
How to save for your down payment faster
Several programs help Canadians — particularly first-time buyers — save for a down payment:
First Home Savings Account (FHSA)
The FHSA lets you save up to $8,000 per year (lifetime maximum of $40,000) in a tax-deductible, tax-free growth account specifically for your first home. Contributions reduce your taxable income like an RRSP and withdrawals for a qualifying home purchase are completely tax-free like a TFSA.
Home Buyers’ Plan (HBP)
The Home Buyers’ Plan allows you to withdraw up to $60,000 from your RRSP tax-free to buy your first home. You must repay the withdrawal over 15 years, starting two years after the withdrawal.
TFSA savings
Your TFSA is another powerful vehicle for down payment savings. Investment growth is completely tax-free, and withdrawals don’t affect your taxable income.
Combining programs
First-time buyers can use all three programs simultaneously:
- FHSA: Up to $40,000
- HBP: Up to $60,000 per person ($120,000 for a couple)
- TFSA: No maximum (limited by contribution room)
A couple maximizing all three programs could access over $200,000 for their down payment. See the first-time home buyer programs guide for the complete list of available incentives.
Down payment vs. closing costs
Your down payment is not the only upfront cost when buying a home. Budget for these additional closing costs:
| Cost | Typical Range |
|---|---|
| Land transfer tax | $0 - $20,000+ (varies by province) |
| Legal fees | $1,000 - $2,500 |
| Home inspection | $300 - $600 |
| Title insurance | $200 - $500 |
| Property tax adjustment | Varies |
| Moving costs | $500 - $3,000 |
Land transfer tax is the largest variable cost. Use the land transfer tax calculator for your province to estimate this amount. Some provinces like Alberta and Saskatchewan charge no land transfer tax.
The 20% down payment threshold
Putting 20% down eliminates mortgage insurance entirely and gives you access to:
- No mortgage insurance premium — saving thousands
- Longer amortization options — up to 30 years from most lenders
- More lender flexibility — potentially better rates and terms
- Lower monthly payments — smaller mortgage balance
However, saving 20% on an expensive home can take years. For a $600,000 home that requires $120,000 down, it may make more financial sense to buy with 5-10% down and pay the insurance rather than continue renting while saving.
For specific 20% down payment scenarios, see:
- 20% down on a $300K house
- 20% down on a $400K house
- 20% down on a $500K house
- 20% down on a $700K house
- 20% down on a $1M house
Stress test and mortgage qualification
Regardless of your down payment size, all Canadian mortgage borrowers must pass the mortgage stress test. You must qualify at the higher of:
- Your contracted mortgage rate plus 2%, or
- 5.25% (the floor rate)
This means even if your rate is 4.0%, you must prove you can afford payments at 6.0%. Use the debt service ratio calculator to check your GDS and TDS ratios before applying.
Frequently asked questions
What is the minimum down payment in Canada?
The minimum is 5% on the first $500,000, 10% on the portion between $500,001 and $1,499,999, and 20% on homes priced at $1,500,000 or more.
Do first-time homebuyers need a different down payment?
No, the same minimum down payment rules apply to all buyers. However, first-time buyers of new builds can access 30-year amortization, and programs like the FHSA and HBP help first-time buyers save faster.
How much is mortgage insurance in Canada?
Mortgage insurance premiums range from 2.80% to 4.00% of the mortgage amount for standard 25-year amortizations. For 30-year amortizations (first-time buyers and new builds), premiums are 3.00% to 4.20%.
Can I avoid paying mortgage insurance?
Yes, if your down payment is 20% or more of the purchase price, no mortgage default insurance is required.