In Canada, the minimum down payment is 5% on homes under $500,000, and 5% on the first $500,000 plus 10% on any amount above that, up to the $1.5 million insured mortgage cap. Buyers putting down less than 20% must get mortgage default insurance, typically through CMHC. First-time buyers and new construction buyers can also qualify for 30-year amortization instead of the standard 25 years.
If you've been playing with my mortgage calculator and still aren't sure how much you actually need to save, you're not alone — the down payment rules in Canada aren't as simple as "put down 20%." Here's the real breakdown, no jargon, so you know exactly where you stand.
The minimum down payment isn't one number
Canada's minimum down payment works on a sliding scale based on your home's purchase price:
Under $500,000: minimum down payment is 5% of the purchase price
$500,000 and up (to the $1.5 million cap): it's 5% on the first $500,000, plus 10% on the portion above that
So on a $600,000 home, that's $25,000 (5% of the first $500,000) plus $10,000 (10% of the remaining $100,000) — $35,000 total, or about 5.8% of the purchase price. It scales up from there the more expensive the home.
That $1.5 million figure isn't random, either — it's the current cap on insured mortgages. As of December 2024, the federal government raised that cap from $1 million to $1.5 million, which meaningfully lowered the minimum down payment required on higher-priced homes (on a $1.4 million home, the reform cut the required minimum down payment by up to $165,000 compared to the old rules).
Under 20% down? You'll need mortgage insurance
Here's the part that trips people up: if your down payment is less than 20% of the purchase price, your lender is required to get mortgage default insurance — most commonly through CMHC (Canada Mortgage and Housing Corporation). This insurance protects the lender, not you, but it's what makes it possible to buy with a smaller down payment in the first place. It gets added to your mortgage and paid off over the life of the loan, so it's worth factoring into your monthly payment math, not just your upfront savings goal.
A real perk if you're a first-time buyer
If this is genuinely your first home — or you're buying new construction, regardless of buyer status — you now qualify for 30-year amortization instead of the standard 25-year maximum, again thanks to the December 2024 mortgage reforms. That extra five years spreads your payments out further and can lower your monthly payment noticeably, even though you'll pay more interest over the life of the loan. It's a real trade-off, and worth running through the numbers both ways before you decide.
What this means for your savings plan
Before you assume you need 20% down, run your actual numbers. Plenty of first-time buyers get into a home with 5–10% down and mortgage insurance built in — and with the 30-year amortization option now available, the monthly payment math might be more within reach than you think. My Buyer's Guide walks through the rest of the process once you've got your down payment figured out — from pre-approval through closing. And if you're weighing an acreage or rural property specifically, the cost math looks a little different, so my Acreage & Rural Property Cost Calculator is worth a look too.
I built my mortgage calculator so you can plug in real numbers and see this play out for your situation specifically. And if you want to talk through what actually makes sense for your budget and timeline, reach out through my Buy a Home page — you don't need to have everything figured out before we talk.
This post is for general informational purposes and reflects federal mortgage insurance rules as of publication. Down payment and insurance requirements can change, and your specific financing options depend on your lender and financial situation — always confirm current numbers with your mortgage professional before making a purchase decision.
