Down Payment for a $1 Million Home in British Columbia

A $1 million price tag is common in many parts of British Columbia, and it sits in the middle of the federal down payment tiers. That is where older information causes the most confusion, since the insurance cap used to be $1 million.

This article walks through how the tiers apply at $1 million, what changed in December 2024, and when 20% is required.

This article covers the law of British Columbia.

How the tiers apply at $1 million

For a price between $500,000 and $1.5 million, the minimum down payment is 5% of the first $500,000 plus 10% of the amount above $500,000. At $1 million that is 5% of $500,000 ($25,000) plus 10% of $500,000 ($50,000), for a $75,000 minimum, but only if the lender and insurer accept it.

Notice that this is not a flat 5% of the whole price. The lower rate applies only to the first $500,000.

Normally the minimum down payment must come from your own funds. As an exception, CMHC lets some borrowers buying a 1 to 2 unit home with a strong credit history use a non-traditional down payment, such as an unsecured personal loan or line of credit, at 90.01% to 95% loan-to-value. Whether that applies to you depends on your lender and your situation, so it is worth confirming with them.

What changed with the insurance cap

The insured mortgage price cap rose from $1 million to $1.5 million effective December 15, 2024, so homes under $1.5 million can be bought with less than 20% down using default insurance.

CMHC's homeowner rule matches this: the price or lending value must be below $1,500,000. However, FCAC's down payment page still shows older wording tied to $1 million, so for a home between $1 million and $1.5 million, confirm with your lender before you rely on a low down payment.

Under CMHC's homeowner rule, a 1 to 2 unit home needs 5% of the first $500,000 of lending value plus 10% of the remainder, with a maximum 95% loan-to-value. A 3 to 4 unit home needs 10%, with a maximum 90% loan-to-value. In both cases the home must be intended for homeowner occupancy.

When 20% down or other rules apply

• The price is $1.5 million or more: the minimum is 20% of the whole purchase price, and mortgage insurance is not available, so you need an uninsured mortgage.
• Your lender may require insurance even with 20% down, usually if you are self-employed or have a poor credit history.
• The property is a rental or investment purchase. It is not eligible for CMHC's 5%-down homeowner product, and CMHC's maximum for small rental loans is $1,000,000. The minimum equity for a rental purchase is worth confirming with your lender or CMHC.

If your down payment is less than 20% of the price, mortgage loan insurance is typically needed.

Insurance cost and payment terms

With a down payment under 20% you typically need mortgage loan insurance, and for CMHC homeowner loans the premium is a one-time charge that may be added to the insured loan. The premium depends on loan-to-value, and the lender pays it but likely passes the cost to you.

For insured purchase loans, the usual maximum amortization is 25 years. As an exception, 30 years is available through CMHC Home Start, and since December 15, 2024, 30-year amortizations are available to all first-time home buyers and all buyers of new builds. A longer amortization lowers payments but usually raises total interest, so compare both.

What to do next

Pre-approval is a useful first step. Lenders review your assets, income and debt to estimate the most they might lend and at what rate, but the process does not guarantee approval, and the rate can be locked for 60 to 130 days depending on the lender. It helps to ask how long the pre-approved rate is guaranteed, whether you automatically get a lower rate if rates fall, and whether the pre-approval can be extended.

• Ask your lender in writing whether your exact price qualifies for an insured mortgage today.
• Compare the minimum down payment with a larger down payment, including the insurance premium a larger down payment might avoid.
• Keep proof of your down payment and closing costs ready, along with ID and proof of employment.
• If you are self-employed, expect to provide two years of CRA notices of assessment.
• Get pre-approved, remembering that it is a ceiling, not a commitment.
• Have a lawyer review your contract before you remove financing conditions.

Frequently asked questions