Key takeaways
- The minimum is 5% of the first $500,000 plus 10% of the portion from $500,000 to $1.5 million. At $1.5 million or more you need at least 20%.
- With less than 20% down, mortgage default insurance is required and its premium is usually added to your mortgage.
- A bigger down payment lowers your loan, your insurance cost and often your payment.
- Closing costs are separate from your down payment.
"How much do I need?" is the first question most buyers ask. The answer depends on the price of the home and whether you'll live in it.
The minimum down payment rules
For a home you'll live in, the minimum is:
- 5% of the first $500,000 of the purchase price, plus
- 10% of the portion between $500,000 and $1.5 million, and
- 20% if the price is $1.5 million or more.
Worked examples
| Purchase price | Minimum down payment | How it's calculated |
|---|---|---|
| $500,000 | $25,000 | 5% × $500,000 |
| $700,000 | $45,000 | $25,000 + 10% × $200,000 |
| $1,000,000 | $75,000 | $25,000 + 10% × $500,000 |
| $1,500,000+ | 20% of price | e.g. $300,000 on $1.5M |
These are minimums for a home you'll live in. Lenders may require more depending on your situation, and rental or investment properties generally need at least 20%.
Mortgage default insurance
If your down payment is under 20%, your mortgage must be insured against default. The insurance protects the lender, not you, but you pay the one-time premium, which is usually added to your mortgage. CMHC's published premiums on the total loan amount are:
| Down payment / loan-to-value | Premium |
|---|---|
| Loan up to 65% of price | 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% |
An amortization longer than 25 years adds a 0.20% surcharge. Other insurers' premiums are similar but may differ.
Example
On a $700,000 home with the $45,000 minimum down, the loan is $655,000, which is about 93.6% of the price. At a 4.00% premium, the insurance is about $26,200, bringing the mortgage to roughly $681,200. Put more down and the premium percentage falls.
Where the money can come from
Savings, an FHSA, an RRSP through the Home Buyers' Plan, or a documented gift from a close family member are common sources. Lenders will want to see where it came from. Read our guide to first-time buyer programs.
Don't forget closing costs
Plan for land transfer tax, legal fees and other costs on top of your down payment. See closing costs in Ontario. You can try your own numbers in the mortgage payment calculator.
Sources and further reading
- CMHC: Mortgage loan insurance premiums
- Canada Revenue Agency: First Home Savings Account
- Canada Revenue Agency: Home Buyers' Plan
This article is general information, not personalized mortgage, legal, tax or financial advice. Rules, rates and eligibility change and depend on your circumstances and lender criteria. Confirm details before you make decisions.
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