Your down payment is the part of the purchase price you pay up front. Your mortgage covers the rest. In Canada, the minimum you need depends on the price of the home, and the rules are more specific than “5% down.” Here’s how it actually works.
The minimum down payment rules
The federal government sets the minimum down payment based on purchase price:
| Purchase price | Minimum down payment |
|---|---|
| $500,000 or less | 5% of the 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 price |
What that looks like in real numbers
| Home price | How it’s calculated | Minimum down |
|---|---|---|
| $400,000 | 5% × $400,000 | $20,000 |
| $750,000 | $25,000 + 10% × $250,000 | $50,000 |
| $1,200,000 | $25,000 + 10% × $700,000 | $95,000 |
| $1,600,000 | 20% × $1,600,000 | $320,000 |
You can confirm these rules on the Government of Canada’s down payment page.
Insured vs. uninsured mortgages
If your down payment is less than 20% of the price, your mortgage needs default insurance through CMHC, Sagen or Canada Guaranty. This insurance protects the lender, not you, but it’s what makes buying with a smaller down payment possible.
The premium is a percentage of your mortgage amount, and the more you put down, the lower it is:
| Down payment | Standard premium |
|---|---|
| 5% to 9.99% | 4.00% |
| 10% to 14.99% | 3.10% |
| 15% to 19.99% | 2.80% |
| 20% or more | No insurance required |
For example, on a $600,000 home with 10% down ($60,000), your mortgage is $540,000. The premium is 3.10%, or $16,740. Most buyers add this to the mortgage balance instead of paying it in cash.
First-time buyers and buyers of newly built homes can choose a 30-year amortization on an insured mortgage, which lowers the monthly payment. It adds 0.20% to the premium and means more interest over the life of the loan, so it’s worth running the numbers both ways.
Where your down payment can come from
- Savings, including a TFSA
- First Home Savings Account (FHSA): contribute up to $8,000 a year, to a $40,000 lifetime limit. Withdrawals for a qualifying first home are tax-free and don’t need to be paid back.
- RRSP Home Buyers’ Plan: first-time buyers can withdraw up to $60,000 from their RRSP, repaid over 15 years
- A gift from immediate family, usually confirmed with a signed gift letter
- Proceeds from selling another property
First-time buyers can use the FHSA and the Home Buyers’ Plan together. A couple using both could have well over $100,000 available for a down payment.
Lenders will want to see where your down payment came from, usually with about 90 days of account history. Large or unexplained deposits slow things down, so keep your statements organized and talk to me before moving money around.
Don’t forget the extras
Your down payment isn’t the only cash you need. Lenders typically want to see that you have about 1.5% of the purchase price set aside for closing costs, such as legal fees, appraisal and property transfer tax. Budget for moving costs and a small cushion for repairs too. I break down closing costs in my guide on BC and Alberta closing costs.
What to do first
Start with a conversation about your budget, not a number you saw online. The minimum down payment gets you in the door, but the right amount depends on your income, your monthly comfort zone and your plans. I can help you work out what makes sense for your goals and which lenders fit your situation.
Frequently asked questions
What is the minimum down payment in Canada?
The minimum down payment in Canada is 5% on the first $500,000 of the purchase price and 10% on the portion between $500,000 and $1.5 million. Homes priced at $1.5 million or more require at least 20% down.
Do I need mortgage insurance if I put 20% down?
No. Mortgage default insurance is only required when your down payment is less than 20% of the purchase price.
Can I use my FHSA and RRSP together for a down payment?
Yes. First-time buyers can withdraw from both an FHSA and their RRSP through the Home Buyers’ Plan for the same home purchase.
Can a family member give me money for my down payment?
Yes. Most lenders accept a gift from immediate family as a down payment, usually with a signed gift letter confirming the money doesn’t need to be repaid.
How much should I save beyond my down payment?
Plan for about 1.5% of the purchase price for closing costs, plus moving costs and a cushion for repairs.
Next step
Every situation is a little different. If you’d like to talk through yours, book a consultation or read more about my home purchase mortgage service.
This guide is general information, not financial or legal advice. Rules, programs and rates change, so please confirm current details with me or the official sources linked above.