Minimum Down Payment Canada 2025

Exactly how much you need to buy a home in Canada — by price range, plus strategies to get there faster.

Canada's Down Payment Rules by Purchase Price

Purchase Price	Minimum Down Payment	Down Payment Amount	CMHC Required?
$400,000	5%	$20,000	Yes (4.00% premium)
$500,000	5%	$25,000	Yes (4.00% premium)
$600,000	5% on first $500K + 10% on $100K	$35,000	Yes (sliding premium)
$750,000	5% on first $500K + 10% on $250K	$50,000	Yes
$999,999	5% on first $500K + 10% on $499,999	$74,999.90	Yes
$1,000,000+	20% minimum	$200,000+	No (not available)

The Sliding Scale Rule Explained

For homes priced between $500,000 and $999,999, Canada uses a sliding scale for minimum down payments. You pay 5% on the first $500,000 of the purchase price, and 10% on any amount above $500,000. For example, on a $750,000 home:

• 5% of $500,000 = $25,000
• 10% of $250,000 = $25,000
• Total minimum down payment = $50,000

This graduated approach was introduced to help moderate-income Canadians still access homeownership in higher-cost markets without needing the full 20% that would apply to million-dollar properties.

Accepted Sources for Your Down Payment

Lenders scrutinize where your down payment comes from. Acceptable sources include:

• Personal savings: Must be in your account for at least 90 days (seasoned funds)
• RRSP Home Buyers' Plan: Up to $60,000 per person tax-free
• FHSA (First Home Savings Account): Tax-free withdrawals for first home purchase
• TFSA: No restrictions — simply withdraw and use
• Gift from an immediate family member: Must be accompanied by a signed gift letter stating it is non-repayable
• Sale proceeds from a previous property
• Inheritance or estate funds
• Employer bonus or commission: Must be documented and verifiable

Borrowed funds — such as a personal loan, credit card advance, or HELOC — cannot be used as a down payment for an insured mortgage. Lenders will verify the source of all down payment funds and will request 90-day bank statement history.

Gift Down Payments: The Rules

Parental gifts are an increasingly common way for first-time buyers to reach the minimum down payment threshold. The rules require:

• The gift must come from an immediate family member (parent, grandparent, sibling)
• A signed gift letter must confirm the funds are a true gift — not a loan — and that no repayment is expected
• The lender will typically want to see the donor's bank statement showing the funds leaving their account and arriving in yours
• For insured mortgages with less than 20% down, a gift alone can satisfy the full down payment requirement if 5%+ comes from the gift

20% Down: Why It's Worth Saving For

Reaching 20% down eliminates CMHC mortgage insurance entirely. On a $600,000 purchase, saving 20% ($120,000) instead of 10% ($60,000 + premium) can save approximately $20,000–$25,000 in total costs. It also gives you access to conventional mortgage rates, which may be slightly lower, and a wider range of lenders including those that don't participate in the insured market.

The math doesn't always favour waiting to save 20%. If home prices are rising faster than you can save, buying earlier with 5–10% down and CMHC insurance may result in better overall financial outcomes. This is a personal calculation that depends on your local market.

Down Payment Saving Strategies

• Open an FHSA immediately — $8,000/year tax-deductible, tax-free on withdrawal
• Use a TFSA for short-term savings with no tax on growth
• Consider a high-interest savings account or GIC ladder for your down payment fund
• Use KOHO's savings tools — automatic round-ups and no-fee banking keep more money in your pocket
• Set a specific timeline and calculate exactly how much to save monthly to hit your target
• Reduce lifestyle spending in one key area (travel, eating out) and redirect it automatically