Down Payment Requirements in Canada

Buying a home is one of the biggest financial decisions you will ever make, and understanding the down payment requirements in Canada is a crucial part of the process.

Whether you are a first-time home buyer or an experienced homeowner looking to purchase a new property, it’s important to be well-informed about the various requirements and how they might affect your buying power.

Minimum Down Payments

The Canadian Mortgage and Housing Corporation (CMHC) is the country’s national housing agency, and it sets the guidelines for down payments on home purchases. The CMHC requires a minimum down payment of 5% for homes that cost less than $500,000.

For homes that cost between $500,000 and $999,999, the down payment requirement is 5% for the first $500,000 and 10% for the portion that exceeds $500,000. If the home you are purchasing costs $1 million or more, the minimum down payment is 20%.

Benefits of a Larger Down Payment

One of the benefits of a larger down payment is that it can help you avoid mortgage insurance, which is required by the CMHC if your down payment is less than 20% of the purchase price.

Mortgage insurance protects the lender in case you default on your loan, and the premium is added to your monthly mortgage payments. By putting down 20% or more, you can avoid having to pay this extra monthly cost.

The Importance of Savings

It’s also important to consider that you will need to have enough savings to cover other costs associated with buying a home, such as closing costs, legal fees, and moving expenses.

A good rule of thumb is to have a minimum of 1.5% of the purchase price saved to cover these additional costs.


Understanding the down payment requirements in Canada is a crucial step in the home-buying process. By being well-informed about the minimum requirements and how they might affect your buying power, you can make an informed decision that is right for you.

If you have any questions or concerns, it’s highly recommended that you speak with a financial advisor or a mortgage specialist who can help guide you through the process. Click here to chat with one of my preferred mortgage specialists in Victoria, BC.

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