How much of a down payment do I need to buy a home in Ontario?

The minimum down payment in Canada depends on the purchase price. For homes priced up to $500,000, the minimum is five percent. For the portion of the price between $500,000 and $999,999, you need ten percent on that portion. For homes priced at $1,000,000 or more, the minimum is twenty percent — and at that threshold, mortgage default insurance is not available at all.

These are federal minimums that apply across Canada, including Ontario. When your down payment is below twenty percent, you must purchase mortgage default insurance through CMHC, Sagen, or Canada Guaranty. The insurance premium is added to your mortgage and ranges from a small to a significant percentage of the loan, depending on your loan-to-value ratio.

A larger down payment reduces your monthly payments, eliminates the insurance premium, and may open up better rates. Many buyers in Ontario — particularly in higher-cost markets like the GTA — find saving for twenty percent difficult, so default-insured mortgages are very common. Speaking with a mortgage broker early helps you understand exactly what you need for your target price range.