Planning4 min read
How Much Down Payment Do You Need?
Minimums, sweet spots, and the 20% rule.
Down payment minimums in Canada depend on the purchase price. Knowing the brackets — and the 20% sweet spot — helps you plan.
The minimum brackets
- 5% on the portion of the price up to $500,000
- 10% on the portion between $500,000 and $1,499,999
- 20% on homes $1,500,000 and above
Worked examples
- $400,000 home → 5% = $20,000
- $700,000 home → 5% of 500k + 10% of 200k = $25,000 + $20,000 = $45,000
- $1,500,000 home → 20% = $300,000
Why 20% matters
At 20% or more, you skip CMHC insurance — saving thousands. But you also lose access to insured rates, which can sometimes be lower.
Where the money can come from
- Your savings (FHSA, TFSA, non-registered)
- RRSP via the Home Buyers' Plan (up to $60,000)
- Gifted funds from immediate family (lender will need a signed gift letter)
- Sale of existing property
Key takeaways
- Minimum 5% under $500k, scaled up after that
- 20% removes CMHC insurance
- Lender wants to see 90 days of source-of-funds history
- Don't forget closing costs on top of the down payment
Sources used
Disclaimer: This guide is for educational purposes only and does not constitute financial, mortgage, legal, or tax advice. Always verify details with qualified professionals and financial institutions.