Mortgage Down Payments

Questions about how much to put down? We'll set you up with all the details.

Whether you're interested in buying your first home, or a vacation or income property — lenders expect you to put some cash towards your purchase, called a down payment.

Your down payment secures at least a small portion of equity in your home or property. It also indicates your financial commitment towards such a large purchase and the resulting mortgage loan. Before you start the pre-approval process and house-hunting, you'll need to know how much you can put towards a down payment.

Tip: Be sure to have your down payment ready at least 30 days before you apply for a mortgage loan (some lenders require longer).

The minimum down payment in Canada is 5% of the purchase price.

Just 5% down can help you own a home, though there are price restrictions for this amount. And, any down payment between 5% and 20% of the home price means that your mortgage will require mortgage default insurance to protect the lender, provided by Canada Mortgage and Housing Corporation (CMHC), Sagen or Canada Guaranty.

Called a high-ratio mortgage, the legal requirement for default insurance means that you can still get a home with less than 20% down, but it comes with added premiums relative to your mortgage size (after the down payment is deducted from the home price).

Depending on the lender, you can usually access the same (or lower) interest rates compared to a conventional mortgage (see info below). We can get your best rates, regardless of your down payment amount. But overall, the more money you can save and put down on your purchase, the lower your mortgage and payments will be.

Here's the size of down payment you'll need based on the home's purchase price.

• $500K or less – 5% of the purchase price
• $500K to $999,999 – 5% of the first $500K and then 10% for the amount over that
• $1M or more – you'll need 20% of the total purchase price (20% or more down payment is considered a conventional mortgage)

A conventional mortgage can save you more over the long run.

If you supply a down payment of 20% or more for any home price, it's considered to be a conventional mortgage, which doesn't legally require mortgage default insurance. That means that the bank carries more capital in order to provide your mortgage, which can sometimes mean slightly higher rates.

But overall, the more you put down, the lower your mortgage amount, and the more you'll save through lower monthly payments and the overall interest cost of your mortgage. Plus, you'll build equity in your home faster and likely have access to better product options.

How does a down payment help your credit situation?

A down payment becomes increasingly important if your credit history is less than stellar. Some lenders may overlook past credit blemishes, or not insist on verifying income or other financial status, if you're able to provide 35% to 40% of the purchase price for your down payment.

What are some ways to help with a down payment?

• If you're considering a home in your future, it's a good idea to start saving as much as you can, as soon as you can — putting some money away every month will start to add up.
• If you've already been informed that your down payment is insufficient, make it a priority to find ways to save money, such as foregoing a new car or a vacation trip.
• Are you a first-time home buyer? There are government programs, incentives and rebates that may help soften the financial blow, and lend a helping hand to get you into the real estate market.
• You may also be able to borrow your down payment from a secured line of credit, or it can be gifted from a family member (restrictions may apply).

You'll still need to qualify for your mortgage amount (and rate).

With your down payment, you'll need to qualify for your mortgage amount and rate. The recent mortgage stress test regulations mean that you may now qualify for less mortgage. We can help get your best rate, and determine how much house you can go hunting for.

From questions about your down payment, to walking through your own front door — you'll get great advice for the right mortgage fit, and a rate that saves you a pile of cash.