The minimum, by price
Federal rules set the floor for an owner-occupied home:
5%
of the first $500,000 of the price
10%
of the portion between $500,000 and $1,499,999
20%
of the whole price at $1.5 million and above
So on a $650,000 home the minimum is $25,000 (5% of $500,000) plus $15,000 (10% of the next $150,000): $40,000, or about 6.2%. The $1.5 million ceiling for insured mortgages took effect in December 2024; before that it was $1 million.
Under 20%: mortgage default insurance
Put down less than 20% and the mortgage must be insured, through CMHC, Sagen or Canada Guaranty. The premium is a percentage of the loan and slides with your down payment: smaller down payment, higher premium. It is normally added to the mortgage rather than paid in cash, and in Ontario the provincial sales tax on the premium is paid at closing. Insurance is not a penalty: insured mortgages often carry lower rates than uninsured ones because the lender's risk is covered.
20% and up: no insurance, more flexibility
At 20% you skip the premium, can amortize over 30 years with most lenders, and can buy properties insurers won't cover: rentals, some rural homes, very high prices. The trade-off is time. In Waterloo Region, saving 20% can take years longer than saving the minimum, and prices and rents do not wait.
Where the money can come from
- Savings. Lenders trace 90 days of statements.
- FHSA. Tax-deductible in, tax-free out for a first home, up to the annual and lifetime limits.
- RRSP Home Buyers' Plan. Withdraw up to the current limit per person, repaid over 15 years.
- A gift from an immediate family member, with a signed letter that no repayment is expected.
- Equity in a home you already own, if you are moving up.
Borrowed down payments (a line of credit, a personal loan) are possible with some lenders but count as debt and change what you qualify for. Talk to me before going that route.
Don't forget closing costs
Land transfer tax, legal fees, title insurance, adjustments and moving costs come on top of the down payment. Ontario first-time buyers get a land transfer tax rebate, but you still need cash for the rest. Lenders typically want to see roughly 1.5% of the price available for closing, over and above the down payment. The closing costs calculator adds it up for any price.
So how much should you put down?
The honest answer: the amount that gets you into a suitable home without emptying your emergency fund. A bigger down payment is not automatically better if it leaves you with nothing when the furnace fails in February. Run both scenarios, minimum and 20%, and look at the monthly payment, the total interest and the cash you would have left. That is a twenty-minute conversation, and it is the one I have most often with first-time buyers.
Down payment tiers and program limits are set by the federal government and change from time to time; figures here reflect the rules as of publication. All mortgages are subject to lender qualification and approved credit (O.A.C.).
This article is general information, not financial advice, and quotes no rates. Your situation may differ; speak with a licensed mortgage professional.