- The minimum down payment rises in three tiers as the price of the home goes up, and it is 20% for homes of $1.5 million or more.
- Putting down less than 20% will typically mean you need mortgage loan insurance, and CMHC insurance requires a purchase price below $1,500,000.
- Newcomers can qualify for CMHC insurance, but the rules depend on your status and your credit.
Before you start looking at listings in Ontario, it helps to know how much cash you need to bring to closing. The minimum down payment is not one flat percentage. It changes with the price of the home.
This article explains the federal tiers, how to work out your own number, when mortgage insurance comes in, what newcomers should know, and two registered plans that can help you save. It is general information, not advice on your own purchase.
The three down payment tiers
Federal guidance sets the minimum down payment in three tiers based on the price of the home.
| Home price | Minimum down payment |
|---|---|
| $500,000 or less | 5% |
| From $500,000 to $1.5 million | 5% of the first $500,000 plus 10% of the portion above $500,000 |
| $1.5 million or more | 20% |
These are minimums. Lenders may ask for more depending on your finances, and a larger down payment reduces what you borrow.
How to work out your number
For a home in the lowest tier, multiply the price by 5%. For a home at the top tier, multiply the price by 20%.
The middle tier is where people get tripped up, because the percentage applies in two slices. You take 5% of the first $500,000 of the price. Then you take 10% of only the amount that sits above $500,000. You add the two results together.
The 10% rate does not apply to the whole price. The first $500,000 is always treated at 5% in that tier. If you want to test a specific price, do the two steps on a calculator, then confirm the figure with your lender or mortgage broker.
Less than 20% down: mortgage loan insurance
If your down payment is below 20% of the price, you will typically need mortgage loan insurance.
There is a price ceiling. For CMHC homeowner mortgage loan insurance, the purchase price must be below $1,500,000. How this limit applies to your purchase depends on your situation, so it is worth confirming with a lawyer. In practice, a home at $1.5 million or more needs the full 20% down, which matches the top tier.
Where the down payment can come from
One traditional down payment source is a non-repayable financial gift from a relative. The word non-repayable matters, because it separates a gift from money you would have to pay back. How a lender treats money from a relative depends on your situation, so it is worth confirming with a lawyer.
- Keep records of where the money came from, such as bank statements.
- If a relative is giving you a gift, ask your lender what written confirmation they require.
- Do not move money around at the last minute without being able to explain it.
Newcomers to Canada
CMHC says permanent residents can use all of its homeowner mortgage loan insurance products, with no minimum period of residency. Non-permanent residents need legal authorization to work in Canada, such as a work permit.
A down payment from 5% applies, and at least one borrower or guarantor needs a credit score of at least 600. If you have limited Canadian credit history, alternatives such as an international credit report may help support your application.
Separate rules apply to some non-Canadians buying residential property, so check your status before you make an offer. A real estate lawyer can confirm what applies to you.
Ways to fund it, and what to do next
Two federal programs can help you build the down payment. With a First Home Savings Account (FHSA), you have $8,000 of participation room in the year you open your first account, and the lifetime limit is $40,000. A qualifying withdrawal is tax-free and does not have to be repaid, but you must meet all the conditions at the time of withdrawal.
With the RRSP Home Buyers' Plan (HBP), the withdrawal limit is currently $60,000, and you repay it to your RRSP over up to 15 years. You can use the FHSA and the HBP together for the same qualifying home if you meet all the conditions at the time of each withdrawal.
- Check the price tier your target homes fall into and calculate your minimum.
- Decide whether you will put down 20% or use mortgage loan insurance.
- Gather proof of savings, gifts and income.
- Ask a lender or broker for a pre-approval.
- Speak with a lawyer or accountant before you sign an agreement of purchase and sale.
Frequently asked questions
Can I buy a home in Ontario with 5% down?
Yes, for a home of $500,000 or less the minimum is 5%. Because that is below 20%, you will typically need mortgage loan insurance.
Is the minimum different for a home over $500,000?
Yes. For homes from $500,000 to $1.5 million, you pay 5% of the first $500,000 plus 10% of the portion above $500,000. At $1.5 million or more, the minimum is 20%.
Can my parents give me money for the down payment?
A non-repayable financial gift from a relative is a traditional down payment source for CMHC homeowner mortgage loan insurance. How a lender treats a gift from a relative depends on your situation, so it is worth confirming with your lender or a lawyer.
Do I need to be a permanent resident to get CMHC insurance?
Not necessarily. Permanent residents can use all CMHC homeowner insurance products with no minimum period of residency, and non-permanent residents need legal authorization to work in Canada, such as a work permit. At least one borrower or guarantor also needs a credit score of at least 600.
Sources
- CRA Tax Tip 2025 – Make the most of your FHSA — canada.ca
- CRA – Withdrawals from your FHSAs — canada.ca
- CRA – What is the Home Buyers' Plan — canada.ca
- Financial Consumer Agency of Canada – How much you need for a down payment — canada.ca
- CMHC – General requirements for homeowner mortgage loan insurance — cmhc-schl.gc.ca
- CMHC – Newcomers — cmhc-schl.gc.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a real estate question
Start a file online — flat, published fees, reviewed by a licensed lawyer before a dollar is owed.