How Much Do You Really Need Down?
Your down payment is the portion of a home's purchase price you pay from your own resources, with the mortgage covering the rest. In Canada, the amount you need depends mostly on the price of the home — and it shapes almost everything about your mortgage, from whether default insurance applies to what your monthly payment looks like. Here's how it works in plain English.
Minimum down payment tiers
In Canada the minimum generally scales with the purchase price, in bands.
For homes at the lower end of the price scale, the general minimum down payment is 5% of the purchase price. This is the floor that applies to most entry-level and moderately priced properties.
In the middle price band, a blended calculation typically applies: roughly 5% on the first portion of the price and about 10% on the amount above a set threshold. This nudges the required down payment upward as the price climbs.
Above a higher price threshold, a minimum of 20% down generally applies. At this level the purchase is usually financed without default insurance (see below).
The specific dollar thresholds that separate these bands are set by federal rules and are updated from time to time, and program eligibility varies. Treat the tiers above as the general framework — we'll confirm the current figures and how they apply to your price point when we look at your situation together.
Insured vs uninsured
How much you put down determines whether mortgage default insurance is part of the picture.
Insured (high-ratio)
When your down payment is less than 20% of the purchase price, the mortgage is considered "high-ratio" and generally requires mortgage default insurance. The premium is typically added to your mortgage balance rather than paid up front. This insurance protects the lender, not the borrower, and it is what makes smaller down payments possible on eligible purchases.
Learn more about how default insurance works on our CMHC & mortgage insurance page.
Uninsured (conventional)
When your down payment is 20% or more, the mortgage is "conventional" and default insurance is generally not required. This avoids the insurance premium, though other lender qualification rules still apply. Conventional financing also opens up options that are not available on insured mortgages, such as certain amortization lengths and property types.
Eligibility, pricing and program availability differ between insured and uninsured mortgages, and final decisions rest with the lender.
Gifted down payments & source of funds
Lenders confirm not just that you have the money, but where it came from.
Gifts from family
A down payment gifted by an immediate family member is common and widely accepted. Lenders will usually ask for a signed gift letter confirming the money is a true gift with no expectation of repayment, along with evidence that the funds have been received into your account.
Why lenders verify the source
Lenders and their insurers are required to confirm that down payment funds are legitimate and accumulated from acceptable sources — savings, investments, a gift, sale of an asset, and so on. As a general concept, you can expect to show a history of your funds (a roughly 90-day paper trail is a common benchmark) so any large or recent deposits can be explained. This is a standard part of responsible lending, not a reflection on you personally.
What tends to help
Keeping clean, complete statements and being ready to explain deposits makes this step smoother. For a fuller picture of what happens behind the scenes, see how lenders assess a file on our underwriting page. Documentation requirements and acceptable sources ultimately depend on the lender and insurer guidelines that apply to your file.
How your down payment affects your mortgage
A larger down payment changes several numbers at once.
Every dollar you put down is a dollar you don't borrow. A bigger down payment means a smaller mortgage, which means less interest paid over the life of the loan.
Crossing the 20% threshold generally removes the default insurance premium. Below it, the premium is typically added to your balance and financed over the amortization, so it affects both your loan size and your payment.
A smaller loan (and no insurance premium) generally lowers your regular payment. The exact effect depends on your rate, amortization and the mortgage details that apply at the time.
The easiest way to feel the trade-off is to model it. Try different down payment amounts on our mortgage calculators to compare loan sizes and estimated payments side by side.
Related pages
CMHC & Mortgage Insurance
How default insurance works when you put down less than 20%.
Closing Costs
The other cash you'll need at closing, beyond the down payment.
First-Time Home Buyers
Programs, incentives and steps for buying your first home.
Calculators
Model down payment amounts, loan sizes and payments.
Not sure how much to put down?
Let's weigh insured vs conventional for your situation.