Mortgage Down Payment Guide
Everything you need to know about down payments in Canada — minimum requirements by home price, exactly how much CMHC insurance costs, and how to save your down payment faster.
Minimum Down Payment in Canada
Homes under $500k
5%
Min $25k on a $500k home
$500k–$999k homes
5% + 10%
5% on first $500k, 10% on remainder
Homes $1M+
20%
No CMHC available — 20% required
Minimum Down Payment by Home Price
5% applies to full price
5% applies to full price
$25k (5% on $500k) + $10k (10% on $100k)
$25k (5% on $500k) + $25k (10% on $250k)
$25k (5% on $500k) + $40k (10% on $400k)
20% required — no CMHC available
CMHC Mortgage Insurance Costs
If you put down less than 20%, you must pay CMHC mortgage insurance. The premium is added to your mortgage amount — you don't pay it upfront. Based on a $500,000 home:
| Down Payment | Amount | CMHC Premium | Premium % | Extra/mo |
|---|---|---|---|---|
| 5% | $25,000 | $19,000 | 4.00% | +$90 |
| 10% | $50,000 | $13,500 | 3.10% | +$63 |
| 15% | $75,000 | $8,550 | 2.80% | +$39 |
| 20%+(No insurance) | $100,000 | $0 | 0% | $0 |
Extra/mo = additional monthly payment from insured premium added to loan at 5% over 25 years. PST on CMHC premium applies in ON, QC, MB (must be paid upfront).
True Cost: 5% vs 20% Down Payment
The 20% advantage: You save $552/month and $65,600 in total interest. You also skip $19,000 in CMHC insurance — but you need $75,000 more upfront.
How to Save Your Down Payment Faster
First Home Savings Account (FHSA)
Contribute up to $8,000/year (lifetime $40,000). Contributions are tax-deductible and withdrawals for a first home are tax-free. This is the most powerful savings tool available to first-time buyers.
RRSP Home Buyers' Plan
Withdraw up to $35,000 ($70k per couple) from your RRSP tax-free. You have 15 years to repay it. Best used when you have existing RRSP savings and are close to your down payment target.
High-Interest Savings Account
Park your down payment in a HISA earning 4–5% interest. On $50,000 saved, that's $2,000–$2,500/year in risk-free returns while you finalize your home search.
Gift from Family
Lenders accept down payment gifts from immediate family members. You'll need a gift letter confirming the money doesn't need to be repaid. There's no limit to the gift amount.
Frequently Asked Questions
For a $700,000 home, the minimum is: 5% on the first $500,000 ($25,000) + 10% on the remaining $200,000 ($20,000) = $45,000 total minimum down payment. You'll also need to pay CMHC insurance of about $23,100, which is added to your mortgage.
For insured mortgages (less than 20% down), the down payment must come from your own savings, gifts from immediate family, or government programs — not loans or lines of credit. For conventional mortgages (20%+ down), some lenders allow borrowed down payments, but they'll factor the repayments into your TDS ratio.
CMHC insurance is not optional when putting down less than 20% — it's legally required for insured mortgages. But it does benefit you indirectly: because the mortgage is insured, lenders offer you better interest rates (typically 0.2–0.5% lower than uninsured rates), which partially offsets the insurance cost.
The real question is whether to enter the market sooner with 5% down or wait to save 20%. This depends on your local market appreciation rate vs. your savings rate.
On a median $650,000 home, 20% down = $130,000. If you save $2,000/month in a 4.5% HISA + max FHSA contributions ($8,000/year), you'd accumulate $130,000 in roughly 4.5–5 years. Using an RRSP Home Buyers' Plan on top of this can shorten the timeline if you already have RRSP savings.
Not always. If your mortgage rate is 5% but you can earn 7–8% investing the same money in an index fund, you may be better off with a smaller down payment and investing the difference. However, this calculation changes with risk tolerance, tax situation, and whether you're avoiding CMHC insurance at the 20% threshold.
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