How Much Down Payment Do You Need in Ontario?

Published February 13, 2026 • 7 min read • By Mortgage Wave Team

The down payment is often the biggest hurdle for Ontario home buyers, especially in the GTA where average home prices are among the highest in Canada. Understanding exactly how much you need — and how to get there — is the first step toward homeownership.

Minimum Down Payment Requirements in Canada

Canada's minimum down payment rules are set by the federal government and depend on the purchase price of the home:

Purchase Price	Minimum Down Payment	Amount Needed
$400,000	5%	$20,000
$500,000	5%	$25,000
$600,000	5% + 10% on amount over $500K	$35,000
$700,000	5% + 10% on amount over $500K	$45,000
$800,000	5% + 10% on amount over $500K	$55,000
$1,000,000	5% + 10% on amount over $500K	$75,000
$1,500,000+	20%	$300,000+

Key rule: Homes priced at $1,500,000 or more require a minimum 20% down payment, and mortgage default insurance is not available. This means you need at least $300,000 down for a $1.5M home.

Understanding CMHC Mortgage Insurance

If your down payment is less than 20% of the purchase price, you must pay for mortgage default insurance (commonly called CMHC insurance, though Sagen and Canada Guaranty also offer it). This insurance protects the lender — not you — in case you default on your mortgage.

Mortgage Insurance Premium Rates

Down Payment %	Insurance Premium	Cost on $500K Home
5% – 9.99%	4.00%	$19,000 on $475K mortgage
10% – 14.99%	3.10%	$13,950 on $450K mortgage
15% – 19.99%	2.80%	$11,900 on $425K mortgage
20%+	Not required	$0

The insurance premium is typically added to your mortgage balance, so you don't pay it upfront — but you do pay interest on it over the life of your mortgage. On a $500,000 home with 5% down, the $19,000 insurance premium adds roughly $85/month to your payment.

Is It Worth Putting 20% Down?

This is one of the most common questions we get. The math isn't as straightforward as you might think:

• Benefit of 20%: No insurance premium, lower monthly payment, more equity from day one
• Cost of waiting: If you need years to save an extra 10-15%, home prices may increase more than your savings, and you're paying rent the entire time
• Insured rate advantage: Ironically, insured mortgages (<20% down) often qualify for slightly lower interest rates because the lender's risk is covered by insurance

In many cases, buying sooner with a smaller down payment and paying the insurance premium is financially better than waiting years to accumulate 20%. We can model both scenarios for your specific situation.

Acceptable Sources of Down Payment

Lenders need to verify where your down payment comes from. Acceptable sources include:

• Personal savings — Must show 90-day transaction history in your bank statements
• RRSP withdrawal — Through the Home Buyers' Plan (up to $60,000 per person)
• FHSA withdrawal — First Home Savings Account (up to $40,000)
• Gift from immediate family — Parents, grandparents, or siblings can gift funds with a signed gift letter confirming no repayment is required
• Sale of existing property — Equity from selling your current home
• Non-repayable grants — Some employer or government programs

Not acceptable: Borrowed funds (credit cards, personal loans, lines of credit) generally cannot be used as a down payment for insured mortgages. The lender needs to see that your down payment isn't creating additional debt.

Strategies to Save for Your Down Payment Faster

1. Open an FHSA Immediately

The First Home Savings Account lets you save $8,000/year (tax-deductible) up to $40,000 total, with tax-free growth and withdrawals. This is the single best tool available. Learn more in our First-Time Buyer Guide.

2. Maximize Your RRSP for the Home Buyers' Plan

Contribute to your RRSP and withdraw up to $60,000 tax-free through the HBP. The tax refund from your RRSP contributions can be put right back into your savings.

3. Automate Your Savings

Set up automatic transfers on payday. Treat your down payment savings like a non-negotiable bill. Even $500/month in a high-interest savings account adds up to $18,000 in 3 years (plus interest).

4. Consider a Side Hustle

Dedicate all side income to your down payment fund. Even an extra $1,000/month accelerates your timeline significantly.

5. Look Into Family Gifts

Family gifts are one of the most common down payment sources for first-time buyers in the GTA. If family members are willing and able to help, this can be the fastest path to homeownership. Just ensure proper documentation.

6. Reduce Expenses Strategically

Review your largest expenses: housing (can you get a roommate?), transportation (can you use transit?), and subscriptions. Redirecting even $500/month makes a meaningful difference.

Down Payment vs. Closing Costs

Remember: your down payment isn't the only cash you need. Budget an additional 1.5%-4% of the purchase price for closing costs including land transfer tax, legal fees, title insurance, home inspection, and appraisal. On a $700,000 home, that's $10,500-$28,000 on top of your down payment.

Talk to a Mortgage Expert

Understanding your down payment requirements is just the beginning. At Mortgage Wave, we help you create a realistic home-buying plan based on your current savings, income, and timeline. We'll show you exactly how much home you can afford today — and how to maximize your buying power.