How Much Down Payment Do You Need in Ontario?

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

How much is a down payment on a house in Ontario?

Quick answer: The federal minimum is 5% for a home priced at $500,000 or less. From $500,000 to under $1.5 million, it is 5% of the first $500,000 plus 10% of the portion above $500,000. At $1.5 million or more, the minimum is 20%. A lender may require more based on the application.

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. This means you need at least $300,000 down for a $1.5 million home. Review the current rules directly on the Financial Consumer Agency of Canada down-payment page.

Understanding CMHC Mortgage Insurance

If your down payment is less than 20% of the purchase price, you will typically need mortgage default insurance (commonly called CMHC insurance, though Sagen and Canada Guaranty also offer it). This insurance protects the lender—not the borrower—and insurer and lender eligibility rules still apply.

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
• Product pricing: Insured and uninsured mortgages may have different rates and conditions; compare total borrowing cost rather than the advertised rate alone

Whether to buy with an insured mortgage or wait for a larger down payment depends on the premium, interest cost, budget, timeline, and housing plans. Compare both scenarios rather than assuming either choice is always better.

Acceptable Sources of Down Payment

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

• Personal savings — Lenders commonly request recent account history to verify the source of funds
• 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

Confirm before borrowing: Rules for borrowed down payments depend on the lender, insurer, debt-service ratios, and product. Do not assume a credit card, personal loan, or line of credit will be accepted; disclose all borrowed funds during the application.

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.