The most common question first-time buyers ask is also one of the most misunderstood: how much do I actually need to put down? In Canada the answer depends on the purchase price, and the minimum is often lower than people expect. But the minimum is not always the smartest amount. The size of your down payment affects your mortgage insurance cost, your monthly payment, the total interest you pay and even which lenders and products you can use.
This guide walks through the federal minimum rules, what happens below and above 20%, where your down payment can come from, and how to decide how much to put down.
Federal minimum down payment rules for owner-occupied homes.
The minimum down payment rules in Canada
The minimum is set federally and applies to homes you will live in. It is calculated in tiers, a bit like income tax brackets:
- Purchase price of $500,000 or less: 5% of the price.
- $500,000 to just under $1.5 million: 5% of the first $500,000, plus 10% of the portion above $500,000.
- $1.5 million or more: 20% of the full price, because mortgage insurance isn’t available at that price.
Because of the tiered formula, the minimum as a percentage of the price rises gradually as prices go up. On a $600,000 home it is $35,000 (about 5.8%). On a $900,000 home it is $65,000 (about 7.2%).
Minimum down payment by purchase price
Below 20% down: mortgage default insurance
If you put down less than 20%, your mortgage must be insured against default through CMHC, Sagen or Canada Guaranty. The insurance protects the lender, not you, but it is what allows lenders to offer high-ratio mortgages, often at slightly lower rates than uninsured ones.
The premium is a percentage of the mortgage amount, and it gets smaller as your down payment gets bigger. It is usually added to your mortgage balance rather than paid upfront. In Ontario, Quebec and Saskatchewan, provincial sales tax on the premium must be paid in cash at closing, so budget for it.
CMHC premium by down payment (purchase)
| Down payment | Loan-to-value | Premium on mortgage amount |
|---|---|---|
| 5% to 9.99% | 90.01% to 95% | 4.00% |
| 10% to 14.99% | 85.01% to 90% | 3.10% |
| 15% to 19.99% | 80.01% to 85% | 2.80% |
| 20% or more | 80% or less | Not required |
30-year amortizations for first-time buyers
First-time buyers, and anyone buying a newly built home, can now choose a 30-year amortization on an insured mortgage. The longer amortization lowers the monthly payment, but it adds a 0.20% premium surcharge and means more interest over the life of the loan. It can help you qualify, but it isn’t free.
What different down payments cost on a $600,000 home
Here is the same $600,000 purchase with four different down payments, using an illustrative 4.59% five-year fixed rate and a 25-year amortization. The insurance premium is added to the mortgage.
Same home, four down payments
| Down payment | Insurance premium | Mortgage amount | Monthly payment | Interest over 25 years |
|---|---|---|---|---|
| $35,000 (5.8% (minimum)) | $22,600 | $587,600 | $3,282 | $396,901 |
| $60,000 (10%) | $16,740 | $556,740 | $3,109 | $376,057 |
| $90,000 (15%) | $14,280 | $524,280 | $2,928 | $354,131 |
| $120,000 (20%) | None | $480,000 | $2,681 | $324,222 |
Monthly payment on a $600,000 home
Putting down more saves money in two ways: you borrow less, and you pay a smaller insurance premium (or none at all). In this example, the gap between the minimum and 20% down is about $72,680 in interest over 25 years, plus the $22,600 premium you avoid.
Where your down payment can come from
Lenders need to see that your down payment is legitimate and has been in your possession, usually for at least 90 days. Acceptable sources include:
- Your own savings, with statements showing the money has been in your account (large deposits will need to be explained).
- A First Home Savings Account (FHSA): up to $8,000 a year and $40,000 over your lifetime, tax-deductible going in and tax-free coming out for a qualifying first home.
- The RRSP Home Buyers’ Plan: first-time buyers can withdraw up to $60,000 each from their RRSPs, then repay it over 15 years.
- A gift from an immediate family member, supported by a signed gift letter confirming it doesn’t have to be repaid.
- Proceeds from selling another property.
Don’t forget closing costs
Your down payment isn’t the only cash you need. Lenders generally want to see closing costs of about 1.5% of the purchase price on top of the down payment. These include land transfer tax (with rebates available for first-time buyers in some provinces), legal fees, title insurance, a home inspection, adjustments for property tax and utilities, and PST on your mortgage insurance premium where it applies.
So how much should you put down?
There’s no single right answer. A larger down payment lowers your costs, but draining every dollar of savings can leave you exposed if something breaks in the first year. A few questions help frame the decision:
- Can you reach the next premium tier? Moving from 9% to 10% down, for example, cuts the premium rate from 4.00% to 3.10%.
- Will you still have an emergency fund? Many advisors suggest keeping three to six months of expenses after closing.
- Is the 20% threshold realistic? Reaching it removes insurance entirely, but uninsured mortgages are stress-tested and priced differently, so compare actual offers.
- What else could the money do? Paying down high-interest debt first can sometimes improve your approval more than a slightly bigger down payment.
Examples use illustrative rates and Canadian semi-annual compounding, and are rounded. They are not rate quotes or advice. Last reviewed September 2026.