Your down payment is the biggest upfront variable in buying a Canadian home. Here is what the minimum rules require, what mortgage default insurance actually costs, and how to think about the optimal down payment for your situation.
Use this with the first-time buyer programs summary, the Home Buyers’ Plan details, and the down payment savings plan to turn percentages into a practical cash target.
Minimum down payment by home price (2026)
| Purchase price | Minimum down payment | Minimum amount example |
|---|---|---|
| Up to $500,000 | 5% of full price | $25,000 on a $500,000 home |
| $500,001–$999,999 | 5% on first $500K + 10% on remainder | $57,500 on an $800,000 home* |
| $1,000,000–$1,499,999 | 5% on first $500K + 10% on remainder | $107,500 on a $1,250,000 home* |
| $1,500,000 and over | 20% minimum (no CMHC available) | $300,000 on a $1,500,000 home |
*These amounts reflect the updated rules in effect since December 15, 2024, which raised the insured mortgage ceiling from $999,999 to $1,499,999.
Calculation example: $800,000 home, minimum down payment
| Portion | Rate | Amount |
|---|---|---|
| First $500,000 | × 5% | $25,000 |
| Remaining $300,000 | × 10% | $30,000 |
| Total minimum down payment | $55,000 |
CMHC mortgage default insurance premiums
Any mortgage with a down payment below 20% requires mortgage default insurance (from CMHC, Sagen, or Canada Guaranty). The premium is added to your mortgage balance.
| Down payment % | CMHC premium (% of mortgage) |
|---|---|
| 5.00%–9.99% | 4.00% |
| 10.00%–14.99% | 3.10% |
| 15.00%–19.99% | 2.80% |
| 20%+ | 0% (no insurance required) |
Premium cost examples on a $700,000 home
| Down payment | Mortgage amount | CMHC premium | Premium in $ added to mortgage |
|---|---|---|---|
| 5% ($35,000) | $665,000 | 4.00% | $26,600 |
| 10% ($70,000) | $630,000 | 3.10% | $19,530 |
| 15% ($105,000) | $595,000 | 2.80% | $16,660 |
| 20% ($140,000) | $560,000 | 0% | $0 |
Going from 5% to 20% down on a $700,000 home:
- Requires $105,000 more cash upfront
- Saves $26,600 in CMHC insurance added to the mortgage
- Lowers the mortgage balance by $105,000
- Eliminates ongoing interest on that additional $105,000 (at 5.25% over 25 years, that is approximately $77,000 in interest savings)
Total value of the 20% vs 5% difference: ~$103,600 — not counting the reduced monthly payment.
The first home buyer advantage: FHSA + HBP
If you are not sure how much home to target first, map registered-account withdrawals to your affordability range before finalizing contribution timing.
If you are a first-time buyer, registered savings can significantly accelerate your down payment:
First Home Savings Account (FHSA)
- Contribute up to $8,000/year (lifetime max $40,000)
- Contributions are tax-deductible (like an RRSP)
- Withdrawals for a qualifying first home are completely tax-free (like a TFSA)
- No repayment required
- Opens to Canadians age 18–71 who are first-time buyers and have not owned a principal residence in the current or previous 4 years
Home Buyers’ Plan (HBP)
- Withdraw up to $60,000 from your RRSP tax-free for a first home
- Must repay over 15 years (starting 2 years after the year of withdrawal)
- $60,000 per borrower — couples can access $120,000 combined
- Must be a first-time buyer (no principal residence owned for 4+ years)
Combined first-time buyer example:
- FHSA: $40,000 (accumulated over 5 years)
- HBP: $60,000 from RRSP
- Other savings: $30,000
- Total down payment available: $130,000
On an $800,000 home, $130,000 represents 16.25% down — one step away from avoiding CMHC entirely.
Down payment vs emergency fund: do not deplete everything
A common first-time buyer mistake is putting every dollar into the down payment — including the emergency fund. After closing, homeowners face:
- Immediate moving costs
- Home maintenance and purchases (30–50% of homes need a repair in the first year)
- Closing costs not covered by the down payment
- Property tax adjustments at closing
Maintain at minimum:
- 3 months of expenses in a liquid emergency fund (separate from down payment)
- 1.5%–4% of purchase price in cash for closing costs
If maximizing your down payment means going into the home with zero liquid savings, wait 3–6 months and save more.
Land transfer tax: an often-forgotten upfront cost
| Province | LTT rate (approximate on $700K) | First-time buyer rebate |
|---|---|---|
| Ontario | ~$9,475 provincial | Up to $4,000 rebate |
| Toronto (add municipal) | +$9,475 municipal | Up to $4,475 additional rebate |
| BC | ~$10,000 | Up to $8,000 for homes under $500K |
| Alberta | No land transfer tax | — |
| Quebec | ~$7,000 | No rebate |
| Nova Scotia | ~$4,200 | No rebate |
How to save for a down payment faster in Canada
| Strategy | How much it helps |
|---|---|
| FHSA ($8,000/year, tax-deductible) | Saves $2,000–$3,360/year in taxes (returned as refund to reinvest) |
| RRSP HBP (use existing RRSP savings) | Access up to $35,000 immediately if RRSP is already funded |
| TFSA (invest down payment savings) | Tax-free growth — invest aggressively if timeline is 5+ years |
| Live with family temporarily | Can save $1,500–$2,500/month vs renting |
| Gift from family | Mortgage lenders accept gift letters (gifted down payment allowed) |
| Employer matching programs | Some employers offer down payment assistance or home purchase programs |
The power of the FHSA for down payments: At $8,000/year for 5 years, a couple contributing the maximum accumulates $80,000 in FHSA principal — plus investment growth, entirely tax-free on withdrawal for a qualifying home purchase. This is the single most powerful tool for Canadian first-time buyers.
Frequently asked questions
Can a borrowed down payment be used in Canada? No. OSFI rules prohibit using borrowed funds (personal loans, credit card advances, LOC) to fund a down payment on an insured (high-ratio) mortgage. The down payment must come from savings, RRSPs, FHSA, gifts from immediate family members, or other non-borrowed sources. For conventional (20%+) mortgages, rules are more flexible but lenders scrutinize the source of funds.
What happens if I can only put 5% down? 5% is the minimum for homes under $500,000. For $500,001–$999,999, 5% is required on the first $500,000 and 10% on the remainder. With 5% down you pay the highest CMHC premium (4.00%), adding significantly to your mortgage balance. If at all possible, saving to 10% down reduces the CMHC premium to 3.10% — a meaningful reduction over the mortgage term.
Related resources
- How Much House Can I Afford in Canada? — Qualifying based on your income
- How Much Do I Need to Retire? — Balancing home ownership with long-term savings
- How Much RRSP Room Do I Have? — Maximizing RRSP before using HBP