How much do I need to put down as a home buyer?


What to know about down payments

Ready to purchase your next home, but unsure what down payment you should be making? In Canada, there are certain regulations for what the down payment must be. The amount of the down payment can also impact whether home buyers are required to have CMHC insurance included in their mortgage payments, and therefore home buyers should consider this additional cost when deciding how much to put down. Homes with down payments less than 20% are required to have CMHC insurance.

It is also important to consider that the down payment you make may be a determining factor in qualifying you with lenders for different amounts of mortgage as a larger down payment makes you less risky to lenders. A great benefit of a larger down payment is that it reduces how much you will need to make for your payments, and in interest over time. Home buyers should weigh these benefits against how much they can comfortably afford for a down payment.

Based on the purchase price of the home you are looking to buy, we have some guidelines for the amount of down payment you will be required to make:

Homes under $500,000

In Canada, a minimum down payment of 5% of the purchase price is required on homes under $500,000.

Homes $500,000-$999,999

Homes ranging from $500,000 in price to $999,999 require a 5% down payment on the first $500,000 and 10% on the remainder.

Homes $1,000,000+

If the purchase price of the home is $1,000,000 or more, you’ll need to plan for a down payment of 20%.

The difference between the deposit and the down payment

The deposit is the amount home buyers offer to sellers as a first payment on the home prior to closing to secure the deal. If the home purchase falls through prior to closing due to anything other than a specified condition, the home sellers are entitled to keep the deposit. It’s essentially collateral for sellers to make sure the buyers will honour the agreement, and to know that the buyer is able to afford to purchase the home. Larger deposits can be more enticing for sellers in competitive offer situations.

The down payment is the total portion paid to the home seller directly from the buyer – outside of the mortgage. The deposit you already made is included in this amount. For example, if you are making a $50,000 down payment and offered a $10,000 deposit then the balance of $40,000 will need to be paid by the home buyer at closing. The remainder of the purchase price would be funded through a mortgage.

So... How Do I Find My Dream Home?

Step By Step.

If you don’t have your financial picture in hand, the best first step is to go to a mortgage broker to understand what you can afford.


Then, it is time to start looking at which neighbourhoods match your price point and home attributes

Gorgeous outdoor patio

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