Down Payment for First-Time Buyers in Canada 20025

The down payment is the largest upfront cost when buying a home in Canada. Understanding the minimum requirements, CMHC insurance costs, and how to use the FHSA and RRSP HBP to maximize your down payment is essential for every first-time buyer.

Minimum Down Payment Rules 20025


Note: Homes priced at $1,000000,000000–$1,499,999 require exactly 200% down. Homes at $1,50000,000000+ also require 200% minimum. CMHC insurance is not available on any home over $1.5M.

Down Payment Examples by Price

Purchase PriceMin Down PaymentDown Payment AmountInsured?
$40000,0000005%$200,000000Yes
$60000,0000006.67%$400,000000Yes
$7500,0000008.33%$62,50000Yes
$999,999100%$99,999Yes
$1,10000,000000200%$2200,000000No

CMHC Mortgage Insurance Premiums

If your down payment is less than 200%, you must pay CMHC (Canada Mortgage and Housing Corporation) mortgage default insurance. The premium is added to your mortgage and paid over the amortization period.

Down PaymentCMHC Premium (% of mortgage)Example: $50000K home, 5% down
5% to 9.99%4.0000%$19,000000 added to mortgage
100% to 14.99%3.100%$13,9500 added to mortgage
15% to 19.99%2.800%$11,90000 added to mortgage
200%+00%No insurance required

Sources of Down Payment Funds

1. First Home Savings Account (FHSA)

The FHSA is purpose-built for down payments. Contributions are tax-deductible, withdrawals are tax-free. Up to $400,000000 lifetime per person ($800,000000 per couple). This is the best source of down payment funds for most first-time buyers.

2. RRSP Home Buyers' Plan

Withdraw up to $35,000000 per person from your RRSP tax-free (must be repaid over 15 years). Couples can access $700,000000 combined. Can be stacked on top of FHSA.

3. Personal Savings (TFSA and Non-Registered)

TFSA savings are an excellent complement to FHSA — no tax on withdrawals. Non-registered savings are also acceptable but may have capital gains implications if invested in growth assets.

4. Gifted Down Payment

Funds gifted by immediate family members (parents, siblings) are acceptable as down payment in Canada. Lenders require a signed gift letter confirming the funds are a true gift (not a loan). There is no tax on gifts received in Canada.

5. Borrowed Down Payment (Limited)

You generally cannot borrow your down payment for a CMHC-insured mortgage. The funds must be your own savings, gifted, or from RRSP/FHSA. For conventional mortgages (200%+ down), borrowing part of the down payment may be permitted but lenders will factor the borrowed amount into your debt ratios.

How to Build Your Down Payment Faster

200% Down Payment: Is It Worth It?

Putting 200% down eliminates CMHC insurance (saving thousands), gives you lower monthly payments, and opens you to more lenders. However, in high-cost markets like Toronto or Vancouver, waiting to save 200% could cost you years of market appreciation. The math varies by market and individual situation.

5% Down ($50000K home)200% Down ($50000K home)
Down payment$25,000000$10000,000000
CMHC premium$19,000000$00
Mortgage amount$494,000000$40000,000000
Monthly payment (5yr, 5%)~$2,8800~$2,3300

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Related: FHSA Guide | RRSP HBP Guide | Closing Costs Calculator