When planning to buy a home in Canada, one of the first questions most people ask is: "How much do I need for a down payment?" It's a crucial piece of the puzzle, and understanding the requirements can help you plan your finances more effectively.
This content breaks down everything you need to know about down payments in Canada: how much you need, what affects the amount, and how to prepare.
What Is a Down Payment?
A down payment is the portion of the home price you pay upfront when buying a property. The rest of the purchase is typically covered by a mortgage.
Your down payment amount impacts:
Your monthly mortgage payments
Whether you need mortgage loan insurance
The interest rate you might qualify for
Minimum Down Payment Requirements in Canada
The minimum down payment you need depends on the price of the home and which lender you usr but typically the big banks use these guidelines:
Homes under $500,000: Minimum 5% down
Homes between $500,000 and $999,999: 5% on the first $500,000 and 10% on the remaining amount
Homes of $1 million or more: Minimum 20% down
Example: If you're buying a $750,000 home in Toronto:
5% on the first $500,000 = $25,000
10% on the remaining $250,000 = $25,000
Total minimum down payment = $50,000
What Happens If You Put Less Than 20% Down?
If your down payment is less than 20%, your mortgage can be considered high-ratio, and you'll need to pay for mortgage loan insurance, usually through the Canada Mortgage and Housing Corporation (CMHC) or Genworth.
Mortgage insurance protects the lender, not the buyer, but it allows you to access homeownership with a lower down payment.
Where Can Your Down Payment Come From?
Accepted sources for a down payment include:
Personal savings
RRSPs
Gifted funds from immediate family
Equity from the sale of another property
How to Plan for a Down Payment
Set a goal: Know the type of home and price range you’re aiming for
Understand closing costs: Down payment is only part of what you need
Automate savings: Set up a dedicated savings account or use FHSA/RRSPs
Talk to your real estate agent: They'll help you build a plan and connect with the right professionals to set a realistic timeline
Your down payment is one of the biggest financial steps in buying a home, but it’s also one of the most manageable with the right strategy. Whether you’re buying your first condo or upsizing to a family home, understanding these thresholds is key to making confident decisions.
Looking for a personalized plan? Our Unna team is here to help you navigate the numbers and find the best path forward. Click here to contact us.
