by MacDonald Property Group | June 3 2025 | Mortgages, Financing, First-Time Buyers
🏡 How Much Do You Really Need for a Down Payment in Canada?
(Updated for 2025)
One of the most common questions we hear from homebuyers is:
“How much do I actually need for a down payment?”
It’s a crucial part of the home buying process — and understanding the rules can help you plan ahead, qualify for better mortgage terms, and set realistic expectations.
💰 What Is a Down Payment?
A down payment is the upfront cash you contribute when buying a home. The rest of the purchase price is covered by your mortgage.
📊 Minimum Down Payment Rules in Canada (2025)
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Homes priced at $500,000 or less:
➤ Minimum 5% -
Homes priced between $500,000 and $1.5 million:
➤ 5% on the first $500,000
➤ 10% on the portion above $500,000 -
Homes priced at $1.5 million or more:
➤ Minimum 20%
🛡️ What If You Have Less Than 20%?
If your down payment is under 20%, you’ll need to purchase mortgage default insurance (also known as CMHC insurance). This protects the lender and allows more Canadians to enter the housing market with a lower upfront investment.
🏦 Where Can Your Down Payment Come From?
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Personal savings
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A gift from immediate family (must include a signed letter)
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RRSP withdrawals under the Home Buyers’ Plan (up to $35,000 per person, tax-free)
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First Home Savings Account (FHSA) — tax-deductible contributions and tax-free withdrawals for first-time buyers
🔑 Other Key Mortgage Terms to Know
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Pre-approval: Locks in your mortgage rate for 90–120 days
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Fixed vs. Variable Rates: Fixed = predictable; Variable = potentially lower (but fluctuates)
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Amortization Period: Typically 25 years; longer periods available with 20%+ down
💡 Tips to Save Your Down Payment Faster
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Set up automatic transfers to a dedicated savings account
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Use bonuses, tax refunds, or side hustle income
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Cut back temporarily on non-essentials
Final Thoughts
Your down payment is one of the biggest financial decisions you’ll make as a homebuyer. But the good news? You don’t have to figure it out alone. Whether you’re buying your first home or your fifth, understanding your options gives you the confidence to move forward.
Have questions or ready to take the next step? Let’s talk. We’ll connect you with trusted mortgage professionals and help you map out the best path to homeownership.