Down Payment in Canada: How Much You Need at Every Price

Down Payment in Canada: How Much You Need at Every Price

Short answer: Since December 15, 2024, the minimum down payment in Canada is 5% of the first $500,000 of the purchase price plus 10% of the portion above $500,000, for homes up to $1.5 million. At $1.5 million and above, mortgage default insurance is not available and the minimum is 20%. Below 20%, insurance is mandatory, and the premium depends on your loan-to-value ratio. This guide works the math at real price points so you can see your number before a lender does.

Ask ten Canadian buyers how much down payment they need and most will say "5 percent" or "20 percent," as if those were the only two worlds. The actual system has three zones, and the middle one, where most urban transactions live, blends the two. Knowing which zone your target price falls in changes your savings target by tens of thousands of dollars, and it changes whether you owe a CMHC premium on top. This is the hub guide for our Down Payment Canada series: the rules first, the examples second, the strategy at the end.

The three zones, precisely

Zone 1: $500,000 and under. Minimum down payment is 5% of the purchase price. A $450,000 home needs $22,500 down. Because you are below 20%, the mortgage must be insured against default (CMHC, Sagen, or Canada Guaranty), and you pay the premium.

Zone 2: above $500,000 up to $1.5 million. Minimum down payment is 5% of the first $500,000 ($25,000) plus 10% of the portion above $500,000. On $800,000 that is $25,000 + $30,000 = $55,000, an effective 6.9%. On $1.2 million it is $25,000 + $70,000 = $95,000, an effective 7.9%. Insurance is still required below 20%, and still available because the price is at or under the $1.5 million insured cap.

Zone 3: $1.5 million and above. Mortgage default insurance is not offered at these prices at all. The minimum down payment is 20%, and the mortgage is uninsured (conventional). A $1.6 million home needs $320,000 down, minimum.

The December 2024 change raised the insured ceiling from $1 million to $1.5 million. Before that, a $1.2 million home demanded 20% down ($240,000). Today it demands $95,000 minimum with insurance, or 20% if you want to skip the premium. That single rule change is the subject of our companion piece on the $1.5 million insured cap.

Worked examples at six price points

Price	Minimum down	Effective %	Insured?	Notes
$400,000	$20,000	5.0%	Yes, required	Premium at 95% LTV band
$600,000	$35,000	5.8%	Yes, required	$25K + $10K formula
$800,000	$55,000	6.9%	Yes, required	Most common urban zone
$1,000,000	$75,000	7.5%	Yes, required	Was 20% ($200K) before Dec 2024
$1,499,999	~$125,000	8.3%	Yes, required	Top of the insured world
$1,600,000	$320,000	20.0%	Not available	The cliff: $195K more than at $1.499M

Read the last two rows twice. The minimum down payment jumps by roughly $195,000 when the price crosses from just under $1.5 million to $1.6 million, because you leave the insured world entirely. Buyers shopping near that line should model both sides of it before falling in love with a listing. A slightly cheaper home is not just cheaper; it can demand a quarter of the cash at closing.

The premium you pay for putting less than 20% down

An insured mortgage carries a one-time premium, calculated as a percentage of the loan amount based on your loan-to-value (LTV) ratio. The standard CMHC schedule for owner-occupied homes is: up to 65% LTV, 0.60%; 65.01-75%, 1.70%; 75.01-80%, 2.40%; 80.01-85%, 2.80%; 85.01-90%, 3.10%; 90.01-95%, 4.00%; and 4.50% at the highest band when the down payment comes from non-traditional sources. The premium is normally added to the mortgage balance, so you pay interest on it over the amortization. In Ontario, Quebec, and Saskatchewan, provincial sales tax applies to the premium, and that tax cannot be added to the loan; it is cash due at closing.

Our separate guide to CMHC insurance premiums walks through the premium table in detail, including the useful trick that crossing from 5% to 10% down can cut the premium rate from 4.00% to 3.10% before you save a cent of interest. The premium is the price of buying sooner with less cash; whether it is worth paying is a timing question, and we treat it that way in the guide.

Where the down payment can come from

Lenders and insurers care about the source, not just the amount. The traditional sources are your own savings (with a paper trail, usually 90 days of history), a gift from an immediate family member with a signed gift letter confirming it is not repayable, the RRSP Home Buyers' Plan (up to $60,000 per person), and the FHSA. Borrowed down payments raise your debt ratios and can move you into the 4.50% premium band or out of insured eligibility entirely depending on structure. Our down payment sources guide breaks down what each source requires in documentation. If part of your down payment is a gift, our gifted down payment guide covers the letter and the seasoning rules.

The stress test does not care about your down payment zone

However you reach your down payment, you still qualify under the federal mortgage stress test: you must be able to carry the mortgage at the higher of your contract rate plus 2%, or the Bank of Canada benchmark floor. A bigger down payment shrinks the loan and therefore the payment you must qualify for, which is the main way down payment size helps affordability math. Our stress test guide (search the insights library) covers the qualification math in full.

Thirty years changes the payment, not the down payment

Since December 15, 2024, first-time buyers (on any home) and buyers of newly built homes can amortize an insured mortgage over 30 years instead of 25. That does not change your minimum down payment by one dollar. It changes the monthly payment, and therefore how much house the stress test lets you carry. Our 30-year amortization guide runs the payment math and the total-interest tradeoff honestly, because a lower payment bought with five extra years of interest is a real cost, not a free win.

Strategy: which zone should you aim for?

• If you can reach 20% without draining your emergency fund, you skip the premium entirely and unlock the conventional market. The cost is time and exposure to prices while you save.
• If prices in your market move faster than you can save, the insured route buys you the home sooner at the cost of the premium and a higher balance. The premium is a known, one-time number; the price drift is not. Model both.
• If you are near the $1.5 million line, model the 20% scenario before stretching. The cliff is the largest single cash discontinuity in Canadian home buying.
• Whatever zone you land in, keep closing costs separate. Land transfer tax, legal fees, and (in three provinces) the tax on your CMHC premium are cash on top of the down payment. Our closing costs hub and the provincial guides linked from it will size that stack for your province.

The bottom line

The down payment is a formula, not a folklore number: 5% of the first $500,000, plus 10% of the slice above it, up to $1.5 million; 20% beyond. Add the CMHC premium if you are under 20%, add provincial closing costs, and qualify under the stress test on the resulting loan. Buyers who run those four numbers before they shop rarely get surprised at the lawyer's office. Buyers who shop first and count later meet the $1.5 million cliff the hard way.

Citations: Government of Canada / Department of Finance Canada, insured mortgage and amortization changes effective December 15, 2024 (canada.ca); CMHC, Mortgage Loan Insurance premium schedule (cmhc-schl.gc.ca). Premiums in Ontario, Quebec and Saskatchewan are subject to provincial sales tax that cannot be added to the loan (CMHC).