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How much down payment do I need for my mortgage?
Updated on October 21, 2026 by Aya Al-Hakim | Originally written: April 1, 2024 by Rob McLister
KEY FINDINGS
- A minimum down payment is regulated: Buyers need 5% of the first $500,000 of the home's price plus 10% of the amount above it, for purchases under $1.5 million.
- Tighter rules for homes from $1.5 million up: Homes priced at $1.5 million or more require at least 20% down. No mortgage insurance available.
- Mortgage insurance requirements: Any down payment below 20% requires mortgage loan insurance costing 4% of the amount borrowed with a 5% down payment. Mortgage insurance falls to 3.1% at 10% down.
- Your mostly borrowing 100% for your home purchase with 5% down: A 95% loan plus 4% in mortgage insurance is nearly 99% of a home's price.
- 20% down removes requirement for mortgage insurance: It also opens up more borrowing product choices.
- A bigger down payment is usually better, but not always: Borrowing less lowers your payments and total interest paid, and 20% down avoids mortgage insurance. For some buyers, keeping cash for closing costs, repairs, or high-interest debt can be better, says Victor Tran, a mortgage expert for Rates.ca.
The minimum down payment in Canada is 5% of the first $500,000 of a home's price and 10% of the amount above $500,000, for homes priced under $1.5 million. Any down payment below 20% requires mortgage loan insurance, also called default insurance. Homes priced at $1.5 million or more require at least 20% down and can't be insured.
The amount of down payment you can afford to make on your home purchase depends on your individual circumstances, your capacity to borrow, existing debt payouts, and the 3- to 5-year interest rate horizon.
What is the minimum down payment in Canada?
The minimum depends on the home's purchase price: 5% for homes up to $500,000, a blend of 5% and 10% for homes under $1.5 million, and 20% from $1.5 million up. These are guidelines set by the Canada Mortgage and Housing Corporation (CMHC).
| Purchase price | Minimum down payment | Mortgage loan insurance |
|---|---|---|
| Under $500,000 | 5% | Required |
| $500,000 to under $1.5 million | 5% on the first $500,000, plus 10% on the rest | Required if down payment less than 20% |
| $1.5 million or more | 20% | Cannot be insured |
Source: What is CMHC Mortgage Loan Insurance?
Example: For a $750,000 home, the minimum down payment is $50,000 or about 6.67% of the price: $25,000 or 5% of the first $500,000 plus $25,000 or 10% of the remaining $250,000. For a $1.2 million home, the minimum down payment rises to $95,000, or about 7.92%: $25,000 plus $70,000 (10% of the remaining $700,000).
| Purchase price | Minimum down payment | % of price |
|---|---|---|
| $400,000 | $20,000 | 5.00% |
| $600,000 | $35,000 | 5.83% |
| $800,000 | $55,000 | 6.88% |
| $1,000,000 | $75,000 | 7.50% |
| $1,400,000 | $115,000 | 8.21% |
Use our Mortgage Payment Calculator to see what your monthly payments would be.
How can the FHSA and Home Buyers’ Plan help with your down payment?
Two federal programs can help first-time buyers with their down payment.
- First Home Savings Account (FHSA): You can contribute up to $8,000 a year, to a lifetime maximum of $40,000. Contributions are tax-deductible, and qualifying withdrawals toward a first home are tax-free.
- Home Buyers’ Plan (HBP): You can withdraw up to $60,000 from your RRSP, tax-free, toward a down payment and repay it over 15 years.
Read more: What is mortgage insurance in Canada?
What are tradeoffs of a 5% down payment?
A 5% down payment is the minimum required for homes priced at $500,000 or less according to CMHC rules. It is the cheapest way to become a homeowner in Canada, but it carries the highest mortgage insurance coverage and the thinnest equity cushion.
| Pros | Cons |
|---|---|
| Affordability: Least capital required to buy a home in Canada | Insurance premium: 5% down triggers a mandatory 4% mortgage insurance, which can be added to the mortgage |
| Faster savings: Savings can be accumulated faster than a 20% down payment | You're borrowing nearly 100% of your home's cost: 95% loan plus 4% of mortgage insurance on that loan is close to 99% of a home's price |
| Encourages savings: Buyers start building home equity sooner. If you sell your home, any capital gains are tax-free if you report the sale and had designated the home as your principal residence, according to the CRA | Negative equity risk: If prices fall, you could owe more than your home is worth |
| Better mortgage rates: Lenders typically offer rates comparable to conventional ones on insured mortgages | More interest: Borrowing more or a bigger mortgage with a lower down payment results in higher interest expenses on your mortgage and mortgage insurance |
| Cash flexibility: Leaves cash for investing, education, home improvements, or an emergency fund | Price ceiling: 5% down only works on homes of $500,000 or less |
| Borrowed down payment: CMHC allows an arm's-length loan, such as an unsecured personal loan or line of credit, on 1- or 2-unit homes for borrowers with strong credit. | Debt load rises: Borrowed down payment counts in your debt ratios, and your mortgage insurance rises to 4.50%. Total amount borrowed along with larger mortgage insurance requirements adds to personal debt load and increases monthly debt servicing costs. |
Use our Mortgage Payment Calculator to figure out your monthly payments.
Read more: What's the difference between a deposit and a down payment on a house?
What are pros and cons of putting 10% down on your home purchase?
A 10% down payment lowers required mortgage insurance to 3.1% of your loan, for a home costing under $1.5 million.
| Pros | Cons |
|---|---|
| Everything in the 5% list, plus: | Costly mortgage insurance: 3.1% is lower than 4% but still a significant expense |
| Lower mortgage insurance: 3.1% of loan, compared with 4% at 5% down | Price cap: Home must cost less than $1.5 million |
| Refinancing potential: Bigger down payment improves your refinancing options at the end of a five-year fixed term | Amortization limit: 25 years, or up to 30 years for first-time buyers and buyers of new builds |
| — | Occupancy: Property cannot be a non-owner-occupied rental, which needs 20% equity |
Read next: Ask the mortgage expert: What a U.S. Fed rate hike could imply for Canadian mortgage rates
Should you put 20% down towards buying a home?
A 20% down payment eliminates need for mortgage insurance, which can save thousands of dollars. It is also the minimum required in Canada for homes priced at $1.5 million or more. Putting 20% down on a home below $1.5 million shrinks your mortgage balance.
| Pros | Cons |
|---|---|
| No mortgage insurance: Savings in thousands of dollars | Capital tie-up: Money invested in your home can't be used elsewhere for potentially higher returns |
| Higher purchase price: Makes homes priced at $1.5 million or more possible | Larger mortgage payments for more expensive homes: Monthly payments are higher the more you borrow. |
| Longer amortization: Insured mortgages are capped at 25 years, or 30 years for first-time and new-build buyers | — |
| Refinance eligibility: Refinances with a new lender require an uninsured mortgage | — |
| More product choices: Re-advanceable mortgages require at least 20% equity, and standalone home equity lines of credit (HELOCs) require more than 35% equity, at federally regulated lenders | — |
What are benefits of 35% down payment or more when buying a home?
Putting 35% or more down strengthens your mortgage application and meets the minimum most lenders ask of non-resident buyers. The trade-off is that more of your cash is tied up in your home.
| Pros | Cons |
|---|---|
| Everything in the 20% list, plus: | Same drawbacks as at 20% |
| Better terms: RE/MAX says buyers with a stronger down payment often qualify for more favourable mortgage terms | Less money for other uses: More of your cash is tied up in the home and can't go toward other investments |
| Non-resident buyers: Most lenders require at least 35% down from non-residents to provide financing | — |
How do 5%, 10%, 20%, and 35% down payments compare?
Below 20% down, the insurance premium falls as the down payment grows (4% at 5% down, 3.1% at 10% down). At 20% and above, there is no premium, but more capital is tied up in the home.
| Down payment | Mortgage insurance | Maximum home price | Amortization | Biggest advantage | Biggest disadvantage |
|---|---|---|---|---|---|
| 5% | 4% of loan | $500,000 | 25 years (up to 30 years for first-time buyers and new builds) | Lowest capital needed to buy a home | Home purchase is nearly 99% financed |
| 10% | 3.1% | Under $1.5 million | 25 years (up to 30 years for first-time buyers and new builds) | Lower mortgage insurance frees up cash for pricier homes | Mortgage insurance required is still significant |
| 20% | None | $1.5 million or more possible | Over 25 years (lender's discretion) | No mortgage insurance, more home equity borrowing options available | Capital tied up |
| 35%+ | None | $1.5 million or more possible | Over 25 years (lender's discretion) | Better borrowing rates, widest product access | May lack capital for other investment opportunities |
Sources: premiums from the CMHC premium chart; price limits from CMHC; insured amortization from Finance Canada.
Learn more: Nearly half of Canadians renewing mortgages spend over 50% of their budget on housing
Strategies to help you buy a home
Saving a down payment is only part of the picture. Mortgage expert Victor Tran recommends these four strategies for buyers with limited savings.
| Strategy | Main benefit |
|---|---|
| 1. Start with a realistic budget instead of shopping at the top of your approval | Leaves room for closing costs, moving expenses, and unexpected costs of owning a home |
| 2. Explore first-time buyer programs, such as the Home Buyers' Plan | Let's you use RRSP savings (up to $60,000) toward a down payment, which can make a home purchase possible sooner |
| 3. Consider home options. Look beyond your ideal neighbourhood or property type, such as a condo or townhouse in a nearby community | A more practical way into real estate market that lets you start building equity |
| 4. Plan for cash needed after the down payment, including land transfer taxes, legal fees, insurance, adjustments, and moving costs | Prepares you for costs that add up quickly after closing |
Buyers often focus so heavily on the down payment that they forget to keep money available after closing, Tran says. Closing costs, furniture, small repairs, and an emergency cushion can make the first few months of ownership more expensive than expected.
Many buyers also don't realize they may qualify for first-time buyer programs, or assume the process is more complicated than it is. Tran says it's worth asking early.
The biggest mistake, according to Tran, is treating the down payment as the only goal. Some buyers stretch to put more down and have no savings left, while others put too little down and face tight payments every month.
"The right amount is the one that keeps the mortgage affordable while still leaving the buyer with some financial breathing room after they move in," he says.
Frequently asked questions (FAQ)
What is the minimum down payment for a house in Canada?
It is 5% of the first $500,000 of the purchase price plus 10% of the amount above $500,000, for homes under $1.5 million. Homes priced at $1.5 million or more require at least 20% down, according to CMHC rules.
Can you buy a house in Canada with 5% down?
Yes, but only if the home costs $500,000 or less. Above $500,000, the 10% rate applies to the portion over that amount.
Do you need 20% down to avoid mortgage insurance?
Yes. Any down payment under 20% of the cost of the home requires mortgage loan insurance.
How much mortgage insurance do you need to purchase?
You need 4% of your mortgage when you put 5% down and 3.1% at 10% down. Mortgage insurance can be added to your mortgage. Provincial sales tax on the mortgage insurance must be paid separately at closing in Quebec, Ontario, and Saskatchewan.
What is the maximum home price for an insured mortgage in Canada?
The maximum purchase price for an insured mortgage is just under $1.5 million (up to $1,499,999). Homes priced at $1.5 million or more can’t be insured and require a down payment of at least 20%.
Is it better to put more money down on a house?
Usually, yes. A bigger down payment means you borrow less, so your monthly payments are lower and you pay less interest over the life of the mortgage. If you can put 20% down, you also avoid mortgage default insurance.
That said, it's not always the right move, says mortgage expert Victor Tran. Some buyers are better off keeping money aside for closing costs, repairs, renovations, an emergency fund, or paying down higher-interest debt. In a competitive market, putting a bit less down can also help someone get into a home sooner rather than waiting years to save the full 20%.
Compare Mortgage Rates
Engaging a mortgage broker before renewing can help you make a better decision. Mortgage brokers are an excellent source of information for deals specific to your area, contract terms, and their services require no out-of-pocket fees if you are well qualified.
Here at Rates.ca, we compare rates from the best Canadian mortgage brokers, major banks and dozens of smaller competitors.
Aya AlHakim
Aya AlHakim, Data reporter
Aya Al-Hakim is a data reporter with Rates.ca. Previously, she worked as an online journalist, reporting on a wide range of topics including business, politics, and health. Her work has been featured in Global News, CBC, Yahoo Lifestyle Canada and Canadian Business.
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