How Much Down Payment Do I Need in Canada?
Quick Answer
How Much Down Payment Do I Need in Canada?
The minimum down payment in Canada is 5% for homes under $500,000. For homes priced $500,001 to $999,999, you need 5% on the first $500,000 and 10% on the remainder. Homes over $1,000,000 require a 20% down payment. Down payments under 20% require CMHC mortgage default insurance.
Detailed Explanation
Down Payment Requirements in Canada
The minimum down payment in Canada follows a tiered structure based on the home's purchase price:
Purchase Price Under $500,000
- Minimum down payment: 5%
- Example: $400,000 home = $20,000 minimum down payment
Purchase Price $500,001 to $999,999
- 5% on the first $500,000 + 10% on the portion above $500,000
- Example: $700,000 home = $25,000 (5% of $500K) + $20,000 (10% of $200K) = $45,000 minimum
Purchase Price $1,000,000 or More
- Minimum down payment: 20% of the full purchase price
- Example: $1,200,000 home = $240,000 minimum
- No CMHC insurance available for homes over $1M
CMHC Mortgage Default Insurance
When your down payment is less than 20%, Canadian law requires mortgage default insurance. The insurance premium is:
- 5% to 9.99% down payment: 4.0% premium
- 10% to 14.99% down payment: 3.10% premium
- 15% to 19.99% down payment: 2.80% premium
The premium is typically added to your mortgage and amortized over the loan term.
Sources of Down Payment
- Personal savings
- RRSP withdrawal (Home Buyers' Plan — up to $60,000 per person, tax-free)
- Gift from immediate family member (requires gift letter)
- Proceeds from sale of existing home
- Borrowed funds (with approval — increases GDS/TDS ratios)
How It Is Calculated
How the Down Payment Is Calculated
Formula for Homes Under $1,000,000
| Purchase Price | Calculation |
|---|---|
| Under $500K | Price x 5% |
| $500K to $999.9K | ($500,000 x 5%) + ((Price - $500,000) x 10%) |
| $1M+ | Price x 20% |
Worked Examples
$450,000 home: $450,000 x 5% = $22,500
$750,000 home: ($500,000 x 5%) + ($250,000 x 10%) = $25,000 + $25,000 = $50,000
$1,200,000 home: $1,200,000 x 20% = $240,000
CMHC Insurance Premium Calculation
CMHC Premium = Mortgage Amount x Premium Rate
For a $450,000 home with 5% down ($22,500):
- Mortgage (before CMHC): $427,500
- CMHC premium (4.0%): $427,500 x 4.0% = $17,100
- Total mortgage: $427,500 + $17,100 = $444,600
- PST on CMHC (Ontario 8%): $17,100 x 8% = $1,368 (paid at closing, not added to mortgage)
Example
Example: Buying a $750,000 Home in Ontario
| Item | Amount |
|---|---|
| Purchase price | $750,000 |
| Minimum down payment (5%/10% tiered) | $50,000 |
| Mortgage amount (before CMHC) | $700,000 |
| CMHC premium (4.0% of $700K) | $28,000 |
| Total insured mortgage | $728,000 |
| PST on CMHC (Ontario 8%) | $2,240 (paid at closing) |
| **Total cash needed at closing** | **~$52,240** |
With 20% down ($150,000):
- Mortgage: $600,000 (no CMHC required)
- Saves $28,000 in CMHC premiums
- Monthly payment ~$200 lower
- Total cash needed: ~$150,000 + closing costs
First-Time Buyer Programs
- Home Buyers' Plan (HBP): Withdraw up to $60,000 per person from RRSP tax-free
- First-Time Home Buyers' Tax Credit: Up to $1,500 in tax relief
- Ontario LTT Rebate: Up to $4,000 for first-time buyers
Related Calculator
CMHC Insurance Calculator
Mortgage default insurance
Sources & References
CMHC — Minimum Down Payment
Official CMHC guidelines on minimum down payments and mortgage insurance premiums
Government of Canada — Home Buyers' Plan
CRA information on the RRSP Home Buyers' Plan for first-time buyers
Department of Finance Canada
Federal first-time home buyer programs and incentives
Last reviewed: August 14, 2026
Related Articles
Related Calculators
Related Topics
Related Questions
Ask AI Advisor
Deeper personalized advice