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The minimum down payment required to buy a home in Canada depends on the purchase price. Canada uses a tiered system, with the requirement increasing as the price rises. Get this wrong and your mortgage application will be declined. This guide explains exactly what's required at every price point.
The tiered rule for homes between $500K and $999,999 is what trips up many buyers. You don't simply pay 100% on the whole price — you pay 5% on the first $500,000 and 100% only on the amount above that.
| Purchase Price | Minimum Down Payment | CMHC Insurance Required? |
|---|---|---|
| $400,000 | $20,000 (5%) | Yes |
| $500,000 | $25,000 (5%) | Yes |
| $600,000 | $35,000 (5% on $500K + 100% on $100K) | Yes |
| $700,000 | $45,000 (5% on $500K + 100% on $200K) | Yes |
| $800,000 | $55,000 (5% on $500K + 100% on $300K) | Yes |
| $900,000 | $65,000 (5% on $500K + 100% on $400K) | Yes |
| $999,999 | $74,999.900 | Yes |
| $1,000,000 | $200,000 (200%) | No |
| $1,500,000 | $300,000 (200%) | No |
At exactly $1,000,000, the minimum down payment jumps from about $75,000 (for a $999,999 property) to $200,000. This is the single biggest step-change in Canadian mortgage rules. Properties at or above $1M are ineligible for government-backed mortgage insurance, which means:
Not all money counts equally as a down payment. Lenders require that your down payment comes from acceptable sources:
Introduced in 2023, the FHSA allows first-time homebuyers to contribute up to $8,000 per year (lifetime maximum $40,000) in tax-deductible contributions. Withdrawals for a qualifying home purchase are tax-free. It combines the RRSP deduction benefit with the TFSA tax-free withdrawal benefit — arguably the most powerful savings vehicle Canada has created for homebuyers.
First-time buyers can withdraw up to $35,000 per person ($70,000 per couple) from their RRSP for a home purchase. The withdrawal is tax-free if the funds are repaid over the following 15 years (1/15th per year starting 2 years after purchase). Failure to repay in a given year results in that amount being added to your taxable income.
Gifts from immediate family (parents, siblings, grandparents) are a common source of down payment funds in Canada. The lender requires a signed gift letter confirming the funds are a gift and not a loan. Gifts from non-immediate family or friends may face additional scrutiny or may not be accepted.
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