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Down Payment Calculator Canada 2026: How Much Do You Need?

Updated

Canada’s down payment rules are more nuanced than most buyers realize. The minimum isn’t a flat 5% — it’s 5% on the first $500,000 and 10% on the portion between $500,001 and $999,999. Once you hit $1 million, the minimum jumps to 20%. On top of the down payment, any purchase with less than 20% down requires CMHC mortgage insurance, which adds 2.8–4.0% to your mortgage balance. That insurance protects the lender, not you, but it’s what makes low-down-payment homeownership possible in Canada. The tables below calculate exactly what you need for every price point.

Minimum Down Payment Requirements

Purchase Price Minimum Down Payment
$500,000 or less 5% of purchase price
$500,001 - $999,999 5% on first $500K + 10% on remainder
$1,000,000+ 20% minimum

Down Payment Calculator

Example Calculations

Home Price Calculation Minimum Down Payment
$400,000 $400,000 × 5% $20,000
$500,000 $500,000 × 5% $25,000
$600,000 ($500K × 5%) + ($100K × 10%) $35,000
$750,000 ($500K × 5%) + ($250K × 10%) $50,000
$900,000 ($500K × 5%) + ($400K × 10%) $65,000
$1,000,000 $1,000,000 × 20% $200,000
$1,200,000 $1,200,000 × 20% $240,000

CMHC Insurance Costs

CMHC mortgage insurance is the hidden cost that catches first-time buyers off guard. With 5% down on a $500,000 home, the insurance premium is $19,000 — added directly to your mortgage, meaning you’re actually borrowing $494,000 on a $475,000 mortgage. Each 5% increment in down payment reduces the premium rate: from 4.0% at 5% down to 3.1% at 10% to 2.8% at 15%. At 20% down, insurance isn’t required at all. Whether it makes sense to save longer for a larger down payment depends on how fast prices are rising in your market — in hot markets, the appreciation you miss while saving can exceed the insurance cost.

Insurance Rates by Down Payment

Down Payment Insurance Rate On $500K Mortgage
5% 4.00% $20,000
10% 3.10% $15,500
15% 2.80% $14,000
20%+ 0% (not required) $0

Total Mortgage with Insurance

Home Price Down Payment Mortgage CMHC Insurance Total Mortgage
$500,000 5% ($25,000) $475,000 $19,000 (4%) $494,000
$500,000 10% ($50,000) $450,000 $13,950 (3.1%) $463,950
$500,000 15% ($75,000) $425,000 $11,900 (2.8%) $436,900
$500,000 20% ($100,000) $400,000 $0 $400,000

Down Payment Impact on Monthly Payments

$500,000 Home at 5.5% Rate (25-Year)

Down Payment Amount Mortgage Monthly Payment Total Interest
5% $25,000 $494,000 $3,044 ~$419,000
10% $50,000 $463,950 $2,859 ~$394,000
15% $75,000 $436,900 $2,693 ~$371,000
20% $100,000 $400,000 $2,465 ~$340,000

5% vs 20% down: ~$579/month difference, ~$79,000 less interest.

Down Payment Sources

Eligible Sources

Source Accepted? Notes
Personal savings Yes Most common
Gift from family Yes Gift letter required
RRSP (HBP) Yes Up to $60,000 (must repay)
FHSA Yes Up to full balance
Sale of property Yes Documentation needed
Borrowed (secured) Sometimes HELOC against another property

Not Accepted

Source Accepted? Notes
Credit card No Borrowed unsecured funds
Personal loan No Borrowed unsecured funds
Line of credit Usually no For down payment purposes

Gift Letter Requirements

Document Needs Details
Donor’s name Full legal name
Amount Exact gift amount
Required statement “Gift, not a loan, no repayment expected”
Relationship Family member
Signatures Donor and recipient

First-Time Buyer Down Payment Programs

RRSP Home Buyers’ Plan (HBP)

Feature Details
Maximum withdrawal $60,000 per person ($120,000 couple)
Tax-free If repaid over 15 years
Repayment starts Second year after withdrawal
Annual repayment 1/15 of amount (minimum)

First Home Savings Account (FHSA)

Feature Details
Contribution limit $8,000/year, $40,000 lifetime
Tax treatment Deductible + tax-free growth + tax-free withdrawal
No repayment Unlike HBP
Can combine With HBP for larger down payment

Combined Example

Source Amount
FHSA (2 people) $80,000
HBP (2 people) $120,000
Savings $50,000
Total $250,000

Saving for Your Down Payment

Monthly Savings Needed

Target Timeline Monthly Savings (0% return)
$25,000 2 years $1,042
$50,000 3 years $1,389
$75,000 4 years $1,563
$100,000 5 years $1,667

With 4% Return (FHSA/HISA)

Target Timeline Monthly Savings
$25,000 2 years $1,003
$50,000 3 years $1,308
$75,000 4 years $1,444
$100,000 5 years $1,508

5% vs 20% Down: The Trade-Offs

Reasons for 5% Down

Reason Explanation
Get into market sooner Start building equity
Low savings Can’t wait to save more
Rising prices Get in before prices increase
Investment opportunity Keep cash invested elsewhere

Reasons for 20% Down

Reason Explanation
Avoid CMHC insurance Save thousands
Lower monthly payments More comfortable budget
Better rates available Some lenders offer better rates
More equity buffer Protection against price drops
Avoid stress test on renewal If switching lenders

Closing Costs (Beyond Down Payment)

Cost Typical Amount
Land transfer tax 1-2% of price
Legal fees $1,500-2,500
Home inspection $400-600
Title insurance $200-400
Moving costs $500-2,000
Total additional 3-5% of purchase price

Budget Example: $500,000 Home

Item Amount
Down payment (5%) $25,000
Land transfer tax $6,475 (Ontario)
Legal fees $2,000
Home inspection $500
Title insurance $300
Moving $1,000
Total cash needed ~$35,275

The Bottom Line

Don’t let the down payment stop you from buying if you’re otherwise ready. Five percent down plus CMHC insurance gets you into the market; combine an FHSA and Home Buyers’ Plan to maximize your down payment tax-efficiently. If you can save 20%, you’ll avoid insurance and lower your payments significantly — but waiting years to save more isn’t always worth it in a rising market.