What is the minimum down payment for a first-time home buyer in Ontario?
The minimum down payment rules in Canada are set by federal regulation and apply equally across all provinces, including Ontario. For a home priced at $500,000 or less, the minimum down payment is 5% of the purchase price. For homes priced between $500,000 and $999,999, the minimum is 5% on the first $500,000 and 10% on the portion above that. For homes at $1,000,000 or above, the minimum down payment is 20%.
When your down payment is less than 20% of the purchase price, you are required to purchase mortgage default insurance through CMHC (Canada Mortgage and Housing Corporation), Sagen, or Canada Guaranty. This insurance protects the lender if you default; the premium is added to your mortgage balance and varies based on the size of your down payment relative to the purchase price.
First-time buyers are not subject to a different minimum than repeat buyers, but programs like the FHSA and Home Buyers' Plan can help assemble a larger down payment.
Key takeaways
- The minimum down payment is 5% for homes under $500,000.
- Homes over $1,000,000 require at least 20% down.
- Less than 20% down requires mortgage default insurance (CMHC or equivalent).
- These are federal rules that apply equally across all provinces.