Editor's note, October 6, 2026: this article was reviewed and rewritten in our accuracy check. An earlier version contained investment-return assumptions, savings timelines and a borrowed-down-payment rule we could not confirm; they have been removed or replaced with figures from the sources listed at the end of the article.
In Canada the minimum down payment is 5% of the first $500,000 of the price and 10% of the portion above that, for homes under $1.5 million. Homes priced at $1.5 million or more need at least 20% down, because mortgages on them can't be insured.
Minimum down payment at different prices
- $400,000: $20,000
- $700,000: $45,000
- $1,000,000: $75,000
- $1,400,000: $115,000
- $1,600,000: $320,000
With less than 20% down your mortgage must be insured. The premium is added to the loan (4% of the loan at 5% down with CMHC), and in Ontario the 8% sales tax on it is paid in cash at closing.
Strategy 1: Fill an FHSA first
A First Home Savings Account takes up to $8,000 a year, $40,000 in total, with a tax deduction going in and a tax-free qualifying withdrawal coming out. Nothing is repaid. Couples can each have one. If your purchase is a year or two away, keep the money in low-risk holdings so a market drop doesn't shrink it before closing.
Strategy 2: Add the RRSP Home Buyers' Plan
Each first-time buyer can withdraw up to $60,000 from RRSPs, and can use it on the same home as an FHSA withdrawal. It must be repaid over 15 years, starting in the second year after a withdrawal made in 2026 or later. Repayments you skip are taxed as income. See our FHSA vs HBP comparison.
Strategy 3: A family gift, documented properly
Insurers and lenders accept a gift from an immediate family member as a down payment, but they want a signed gift letter confirming it is not a loan and proof that the money is in your account before closing. Ask your lender exactly what it needs and when, and move the money early so it shows up in your statements. If the money is really a loan, say so: lenders count loan payments in your debt ratios.
Strategy 4: Equity from a home you already own
If you're moving up, the equity in your current home is usually the down payment, either from the sale or, if you buy first, through a bridge loan. Some owners borrow against their home with a home equity line of credit; that's a debt the lender will count, and HELOC borrowing is limited to 65% of your home's value at federally regulated lenders. See our guides to bridge financing and HELOCs.
Strategy 5: A co-borrower or guarantor
Adding a co-borrower whose income counts can raise the amount you qualify for. A co-borrower on title owns part of the home; a guarantor doesn't, but is responsible for the debt if you don't pay. Both should get independent legal advice. A co-owner who isn't a first-time buyer can also reduce the land transfer tax refund.
Insured or conventional?
- Under 20% down (insured): lower entry cost, a premium added to the loan, an amortization of up to 25 years, or 30 for first-time buyers and new builds, and a price cap of $1.5 million.
- 20% or more down (conventional): no premium, and the lender sets the maximum amortization.
Pitfalls to avoid
- Moving large sums into your account right before applying without a paper trail; lenders must verify the source of funds.
- Forgetting closing costs; CMHC suggests 1.5% to 4% of the price.
- Taking on a new car loan or credit card balance before closing.
Want to see what you can afford? Get pre-qualified, try our calculators, or ask Zara, Summitly's AI virtual agent.
