It’s not as simple as a flat percentage, it depends on the home price, your financial situation, and even the type of mortgage you choose. Let’s break it down so you know exactly what to expect.
1. The Minimum Down Payment Rules in Canada
- Homes $500,000 or less: Minimum 5% down.
- Homes $500,000–$999,999: 5% on the first $500K + 10% on the portion above $500K.
- Homes $1,000,000+: 20% minimum (no exceptions).
Example: On a $700,000 home → $500,000 x 5% = $25,000 + $200,000 x 10% = $20,000.
Total = $45,000 minimum down.
2. When Do You Need 20%?
- Homes over $1M automatically require 20%.
- If you want to avoid mortgage default insurance (CMHC), you’ll need 20% down, regardless of home price.
3. What About First-Time Buyers?
- You can put as little as 5% down on homes under $500K.
- Programs like the First-Time Home Buyer Incentive and the Home Buyers’ Plan (HBP) (borrowing from your RRSP) can help boost your down payment.
4. Hidden Costs to Plan For
Your down payment isn’t the only upfront cost. You’ll also need:
- Closing costs (1.5–4% of the purchase price).
- Property transfer tax (unless exempt as a first-time buyer).
- Home inspection & appraisal fees.
5. How to Know What’s Right for You
Sometimes a bigger down payment saves you money (lower payments, less interest). Other times, keeping cash aside for emergencies or renovations makes more sense.
That’s where a broker (like me!) helps with running the numbers for your exact situation so you don’t overextend yourself.
Not sure how much you should put down?
I’ll walk you through your options, explain which programs you qualify for, and help you plan the smartest way to get into your home.
Contact me now to start your mortgage journey!