In Canada, the minimum down payment depends on how much the house costs. If the price is $500,000 or less, you must pay 5%. If it is more than $500,000 and less than $1,000,000, then you pay 5% on the first $500,000 and 10% on the rest. For homes $1,000,000 or more, the required down payment is 20%. This rule comes from CMHC and other federal guidelines.
If your down payment is less than 20%, you must buy mortgage loan insurance. It protects the lender, not you. This insurance is offered by CMHC, Sagen, or Canada Guaranty, and the cost depends on how much you pay as down payment. In most cases, the insurance premium is between 0.6% and 4.5% of the loan amount.
Your income, credit score, and how much debt you have also matter. For example, if someone earns $70,000 per year, they might get approved for a $300,000 house, and they would need at least $15,000 down payment. Some lenders ask for more if the buyer is self-employed or has low credit history.
This blog explains the full down payment requirements in Canada, how much you must pay in each price range, when insurance is needed, and how mortgage rules affect your total cost. It also shows how to use a mortgage down payment calculator to plan better.
A down payment is the money you pay first when buying a home. It comes from your own pocket. The rest of the price is covered by the bank through a mortgage loan. For example, if the house costs $400,000 and you give $20,000, then that is your down payment. If you are a new buyer in Ontario, you can also check First Time Home Buyer Mortgage Ontario options to understand what support or mortgage plans are available for you.
This amount is important. It shows the bank that you are serious. It also helps you borrow less money. In Canada, down payment requirements change with the price of the home.
The rules for down payment requirements in Canada are simple:
These rules are made by the government and followed by banks and lenders. If you pay less than 20%, then you also need to get mortgage loan insurance. This is a rule from CMHC, Sagen, and other insurance companies.
Banks check how much down payment you give to know how safe it is to give you a loan. A bigger down payment means you borrow less. It also shows that you are ready for the cost. If your down payment is less than 20%, then most banks will ask you to buy mortgage insurance.
For example, if you give 5%, the insurance cost is more. If you give 20%, then you don’t need the insurance. The bank also looks at your salary, debt, and credit score to decide.
This is why down payment requirements in Canada are important. They affect how much money you need, how much you borrow, and what the total cost will be.
If the house price is $500,000 or less, you must pay 5% as down payment. This is the minimum rule in Canada. For example, if the price is $400,000, then the down payment is $20,000.
This rule is same in all provinces. It helps many buyers who don’t have big savings. But if you pay less than 20%, you need to buy mortgage insurance. This is from CMHC, Sagen, or Canada Guaranty.
If the home price is more than $500,000 and less than $1 million, you must follow a split rule:
Example: If the house costs $600,000
This rule makes the payment higher for bigger homes, but it is still less than the 20% rule.
If the house price is $1 million or more, the minimum down payment is 20%. So, if the price is $1.2 million, you must pay $240,000.
You also cannot get mortgage insurance for homes over $1 million. This rule is from the government and applies everywhere in Canada.
Homes that cost more than $1 million are seen as higher risk by banks. That’s why they want 20% down. It protects them in case something goes wrong. Also, CMHC and other insurers don’t give insurance for these homes.
This rule makes sure buyers of expensive homes have strong income and savings. It also keeps the housing market more stable.
To know how much down payment Canada rules ask, you need to check the house price and apply the rule.
If the home price is $400,000:
If the home price is $750,000:
If the home price is $1.2 million:
For homes over $1 million, you cannot get mortgage insurance. You must pay full 20%.
You can find your down payment amount by using these steps:
Example for $900,000 home:
These numbers help you plan better. Some people use online calculators to do this faster. But the rule is always same across Canada. Bigger home means bigger down payment.
CMHC means Canada Mortgage and Housing Corporation. It gives insurance to protect the lender if the buyer cannot pay the loan. This insurance is called CMHC mortgage insurance or default mortgage insurance.
You must get CMHC insurance when your down payment is less than 20%. This is for homes that cost under $1 million. If the home price is more than $1 million, CMHC insurance is not allowed.
The bank will arrange this insurance. You don’t have to do anything. But the cost is added to your mortgage.
When your down payment is small, the CMHC fee becomes high. This fee is also called premium. It is a percentage of your loan amount.
For example:
If you borrow $400,000 and your fee is 4%, you pay $16,000 extra. This amount is added to your loan. You also pay interest on it.
That’s why people try to save more than 5%. It helps to pay less CMHC fee.
You can only get CMHC insurance if you follow some rules:
If your mortgage does not follow CMHC rules, then insurance will not be given.
So, CMHC minimum down payment rules help decide who can get the home and how much extra cost they have to pay.
People who are not living in Canada need to give more money. Most banks ask for 35% down payment from non-residents or foreign buyers.
Also, they need to show:
These buyers can’t get help from CMHC. So, they must pay everything without insurance. That is why the cost is more.
If you are self-employed or your income is low, the bank may not accept just 5% down. They can ask for 10% or even 15%. It depends on how risky they think you are.
Banks usually ask you to show:
Sometimes, even with 20% down, they still ask for mortgage insurance. It happens when your credit score is low or your debts are high.
Some buyers need to pay more down because of risk. The bank checks if:
In these cases, they ask for more than normal down. Like, even if house is $500,000, they may want 10% or more instead of 5%.
Also, if you buy a second house or a rental, you must give at least 20% down. Insurance is not allowed in those situations.
To buy a house in Canada, your down payment must come from a legal and clear source. The bank will ask where the money is from. If they don’t like the source, they can say no to the mortgage. Below are the common accepted ways.
Most people use their own savings. You can use:
The money should be in your name. You must show 3 months bank history to prove this money is yours. If the money just appeared, the bank will ask more questions.
If this is your first home, you can take money from your RRSP. This is called the Home Buyers’ Plan (HBP).
You can take up to $35,000 without paying tax now. But you must return this money back to your RRSP in 15 years. If you don’t return it, you will pay tax later.
The RRSP money must stay in the account for 90 days or more before using it.
You can use gift money from your parents or close family. The bank needs a gift letter that says:
Gifts from friends or random people are not allowed.
Some money sources are not accepted in Canada:
The bank wants to see clear documents. So always use sources that can be tracked.
In Canada, some programs can help you if you are buying a home for the first time. These programs can reduce your down payment or make your monthly cost lower. But they also have some rules.
This help comes from the Canadian government. It is called the First-Time Home Buyer Incentive.
You can get:
This help is not free money. It is like a small loan. The government owns that small part of your home. You don’t pay interest, but you must give back the same percent when you sell the house or after 25 years.
To get this help:
Some provinces and cities also give help. It is different in every place.
For example:
Sometimes the help is a grant (you don’t pay back), and sometimes it is a loan (you must pay back). You have to check your local city or province to know what is there.
These programs can make your mortgage smaller, so your monthly payment is less. But if someone else gives you money (like the government), they also own a part of your home.
If they gave you 10%, and your home value goes up, you must return 10% of the new value, not just the old value.
So your equity (your share in the home) is a little smaller. But it still helps many people who don’t have full down payment saved. Some also use options like a Home Equity Line of Credit Ontario later to access funds after buying the house.
If you put less than 20% down payment in Canada, some rules change. The bank sees this as more risky, so they ask you to do more things. Also, your full cost for the house can go up.
When your down payment is under 20%, you must get mortgage insurance. Most people get it from CMHC (Canada Mortgage and Housing Corporation).
This insurance is not for you. It helps the bank, in case you stop paying the loan. But you still have to pay for it.
This cost is called a premium. It is added into your mortgage. It can be from 0.6% to 4.5%, depending on your down payment.
Example:
If your home costs $400,000 and you give only 5% down, your CMHC fee might be around $15,000. This will be added into your mortgage loan.
Because of this, your monthly payments go higher.
If your down payment is low, the bank checks you more. They want to see:
Even if you give 20%, the bank can still ask for insurance if your income or credit is not strong.
Also, when the loan is big, you may need to pay it back in more years — like 25 years or more. This makes monthly cost small, but total interest cost becomes more.
If you give 20% or more, you don’t need to pay for CMHC insurance. That saves a lot of money.
Also:
Example:
For a $400,000 home:
So, it is better to save more before buying.
If you want to buy a house in Canada, first you need to save some money. This money is called the down payment. In 2025, house prices are still high, so it is better to start saving early. How much you save depends on your income and how much time you have.
People earn different amounts, so not everyone can save the same way.
If your income is low:
If you earn average money:
If you have high income:
Saving more can help you get smaller loan and lower monthly cost later.
If you know what price home you want, you can use a mortgage calculator to plan your savings.
Example:
You want to buy a home that costs $500,000.
The minimum down payment is 5%, so you need to save $25,000.
If you want to buy in 2 years, you must save around $1,041 each month.
These calculators help you:
It is better to use tools than to guess.
Before you start saving, it’s smart to ask a bank for pre-approval. It means the bank tells you how much loan they can give you.
They will show you:
When you have this number, you don’t save too little. It makes your plan clear and easy to follow.
In Canada, the down payment requirements change depending on the home price. If your down payment is less than 20%, you also need to pay for CMHC insurance. The table below helps you understand how much money you need to give based on different price ranges. If you are not sure how much down payment you need, you can check helpful guides at Mortgage Fusion.
| Home Price | Down Payment Rule | CMHC Insurance Needed | Example Amount (CAD) |
| $500,000 or less | 5% of total price | Yes | $25,000 for $500,000 home |
| $500,001 to $999,999 | 5% on first $500,000 + 10% on rest | Yes | $45,000 for $750,000 home |
| $1,000,000 or more | 20% of full price | No | $240,000 for $1.2M home |
