Total Down Payment Requirements

The down payment is a critical component of home-buying, and understanding the requirements is essential for financial planning. In Canada, the minimum down payment required varies based on the home’s purchase price. For properties costing $500,000 or less, the minimum down payment is 5%. For properties between $500,000 and $999,999, the down payment is 5% of the first $500,000 and 10% of the portion above $500,000. For homes priced at $1 million or more, the minimum down payment is 20%.

It’s important to note that if your down payment is less than 20% of the purchase price, you must purchase mortgage default insurance, commonly known as CMHC insurance, which protects the lender in case of default. This insurance is added to your mortgage and paid off over time. Saving for a down payment is a significant step towards homeownership, and having a larger down payment can reduce your mortgage amount and potentially save you thousands of interest over the life of the loan.

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