Buying
Minimum down payment rules in Canada, with a worked example
5 min read · Facts checked October 23, 2026
Written by Stonefield Mortgage · Reviewed by David Steinfeld, principal broker · Stonefield Mortgage, FSRA mortgage brokerage licence #13722 · [review pending — before this page is indexed]
Published · Updated
In Canada, the minimum down payment is 5% of the first $500,000 of the purchase price and 10% of the portion from $500,000 to $1.5 million. A home priced at $1.5 million or more needs 20%, and with less than 20% down your mortgage must carry default insurance, a one-time premium usually added to the mortgage. On a $700,000 home, the minimum down payment is $45,000.
The minimum down payment, tier by tier
The down payment is the part of the price you pay yourself. The mortgage covers the rest. The federal minimums work in tiers:
- 5% of the first $500,000 of the price.
- 10% of the portion of the price from $500,000 up to $1.5 million.
- 20% of the full price if the home costs $1.5 million or more.
The down payment limits changed on December 15, 2024. Before then, the 10% tier stopped at $1 million and any home at $1 million or more needed 20% down.
Some older articles and websites still show the old down payment limits, so check the date on anything you read.
Three quick examples of the minimum down payment:
| Purchase price | Minimum down payment |
|---|---|
| $400,000 | At least $20,000 |
| $1,000,000 | $25,000 on the first $500,000 plus $50,000 on the next $500,000, for a minimum of $75,000 |
| $1,600,000 | 20%, or $320,000 |
What default insurance is
Mortgage default insurance protects the lender, not you, if a borrower stops paying. In exchange, default insurance lets lenders accept smaller down payments. Default insurance is required whenever your down payment is less than 20% of the price.
Three insurers provide default insurance in Canada: CMHC (Canada Mortgage and Housing Corporation), Sagen and Canada Guaranty. You do not pick the insurer; the lender arranges the insurance.
What the default insurance premium costs
The premium is a percentage of the mortgage amount, based on your loan-to-value: the mortgage as a share of the home's price. The smaller your down payment, the higher the percentage.
- Loan-to-value from 80.01% to 85%: 2.80% of the mortgage.
- Loan-to-value from 85.01% to 90%: 3.10% of the mortgage.
- Loan-to-value from 90.01% to 95%: 4.00% of the mortgage.
The amortization is the total time it takes to pay off the mortgage. If you choose a 30-year amortization (available on insured mortgages to first-time buyers and buyers of new builds), the premium is 0.20 percentage points higher. Other insured borrowers are limited to a shorter amortization.
The default insurance premium is usually added to your mortgage, so you pay it off over time with interest.
In Ontario there is one more cost: 8% provincial sales tax (PST) on the premium. The PST cannot be added to the mortgage. You pay the PST in cash, through your lawyer, at closing.
The current premium schedule is published by CMHC.
Worked example: a $700,000 home
Here is how the numbers come out at three different down payments, with a 25-year amortization.
Minimum down payment: $45,000
- Down payment: 5% of $500,000 ($25,000) plus 10% of $200,000 ($20,000) = $45,000.
- Mortgage before insurance: $700,000 − $45,000 = $655,000.
- Loan-to-value: about 93.6%, so the premium is 4.00%: $655,000 × 4.00% = $26,200.
- Total mortgage with the premium added: $681,200.
- Ontario PST on the premium, paid in cash at closing: 8% × $26,200 = $2,096.
If you are a first-time buyer and choose 30 years instead, the premium rises to 4.20%, or $27,510, and the PST to $2,200.80.
10% down: $70,000
- Mortgage before insurance: $630,000.
- Loan-to-value: exactly 90% of the price, so the premium is 3.10%, or $19,530.
- Total mortgage with the premium added: $649,530.
- Ontario PST on the premium, paid in cash at closing: $1,562.40.
20% down: $140,000
- Mortgage before insurance: $560,000.
- Loan-to-value: low enough that no default insurance is required, so there is no premium.
- Total mortgage with the premium added: no premium to add.
- Ontario PST on the premium: none, because there is no premium.
Lenders generally call a mortgage with no default insurance insurable if it would still meet the insurance rules, or uninsurable if it would not. Federally regulated lenders still apply the stress test to an uninsured mortgage.
Where the down payment can come from
Lenders generally want to see that the down payment is yours and has been in your accounts for a while, or that its source is documented. Common sources include:
- savings;
- the sale of another property;
- a First Home Savings Account;
- the RRSP Home Buyers' Plan;
- a gift from a close family member, usually with a signed gift letter.
Each lender sets its own documentation rules, so have your statements ready before you apply. Bring your statements to a meeting or upload them through the lender's or broker's secure application. Never send your statements by ordinary e-mail.
Do not forget closing costs
The down payment is not the only cash you need. Land transfer tax, legal fees, title insurance, an inspection and the PST on any insurance premium all come due at or before closing.
Our article on Ontario closing costs covers each closing cost, and the land transfer tax calculator estimates the largest. A real-estate lawyer can confirm the exact figures for your purchase.
What to do next
To see how different down payments change your mortgage and monthly payment, try the mortgage payment calculator. To talk your down payment through with us, use our call-me-back form. Insurance and mortgage approval are always subject to lender approval.
This article is general information for Ontario readers, not financial, legal or tax advice. Mortgage rules change: the facts in this article were checked on October 23, 2026. Every mortgage is subject to lender approval.