Canada minimum down payment guide: rules for every purchase price in 2027
Canada's minimum down payment rules are tiered by purchase price and changed in December 2024 when the insured mortgage cap rose to $1.5 million. This guide explains the exact minimum for every price range, how CMHC insurance premiums are calculated, the 20% threshold, and strategies to save your down payment faster.
Canada's minimum down payment rules changed in December 2024, raising the insured mortgage cap to $1.5 million and creating a new 10% tier for purchases between $1M–$1.5M. Here is the complete breakdown of what you need at every price point — and the strategies to get there.
Minimum down payment by purchase price (2027)
| Purchase price | Minimum down payment | CMHC insurance? | Example ($800,000) |
|---|---|---|---|
| Up to $500,000 | 5% | Yes (4.00% premium) | — |
| $500,001 – $999,999 | 5% on first $500k + 10% on remainder | Yes | $25,000 + $30,000 = $55,000 |
| $1,000,000 – $1,499,999 | 10% throughout (new Dec 2024) | Yes | — |
| $1,500,000+ | 20% | No — conventional only | — |
Step-by-step: how to plan your down payment
- 1Determine the minimum down payment for your purchase price
Canada's minimum down payment is tiered: (1) Homes $500,000 or less: 5% minimum; (2) Homes $500,001 to $999,999: 5% on the first $500,000 + 10% on the portion above $500,000; (3) Homes $1,000,000 to $1,500,000 (new as of Dec 2024): 10% minimum throughout; (4) Homes over $1,500,000: 20% minimum — no insured mortgage available. Example: $800,000 home = ($500,000 × 5%) + ($300,000 × 10%) = $25,000 + $30,000 = $55,000 minimum down payment (6.875%).
- 2Understand the CMHC insurance cost
Any purchase with less than 20% down requires mortgage default insurance (CMHC, Sagen, or Canada Guaranty). The premium is added to your mortgage balance: 5–9.99% down = 4.00% of the insured loan; 10–14.99% down = 3.10%; 15–19.99% down = 2.80%. Provincial sales tax on the premium is due at closing (not added to the mortgage) in Ontario (8%), Quebec (9%), Saskatchewan (6%), and Manitoba (6%). Alberta, BC, and Atlantic provinces have no PST on CMHC premiums. Calculate your exact premium with the <a href="/ca" target="_blank" rel="noopener noreferrer">Canadian mortgage calculator</a>.
- 3Identify eligible down payment sources
CMHC-insured mortgages have strict rules on down payment sources. Eligible sources: personal savings, RRSP Home Buyers' Plan (HBP) withdrawals (up to $35,000 per borrower, $70,000 combined), FHSA withdrawals (up to $40,000 lifetime), gift from immediate family member with a signed gift letter, proceeds from sale of another property. Not eligible as the sole source: borrowed funds, unsecured credit lines, or non-family gifts. Review <a href="https://www.cmhc-schl.gc.ca/consumers/home-buying/mortgage-loan-insurance/cmhc-mortgage-loan-insurance-for-consumers" target="_blank" rel="noopener noreferrer">CMHC down payment eligibility rules</a>.
- 4Factor in the 90-day rule
CMHC requires that all down payment funds have been in your account for at least <strong>90 days before closing</strong> (the "seasoning" rule). If funds are newer, you must provide a paper trail proving their source — e.g., a statement showing RRSP withdrawal, employment income deposits, or a gift letter with the donor's statement. Large deposits appearing within 90 days will trigger documentation requests. Plan your timing: do not sell assets or move large sums in the 3 months before you plan to close.
- 5Use the FHSA and HBP together
First-time buyers can stack the <a href="/guides/canada-fhsa-first-home-savings-account" target="_blank" rel="noopener noreferrer">FHSA</a> and the RRSP Home Buyers' Plan in the same purchase. The FHSA allows up to $40,000 lifetime in tax-deductible, tax-free withdrawals. The HBP allows up to $35,000 per person ($70,000 per couple) as an interest-free RRSP loan repaid over 15 years. Combined, a couple can access up to $80,000 from FHSA + $70,000 from HBP = $150,000 toward their down payment from registered accounts, all tax-advantaged.
- 6Plan for closing costs on top of the down payment
Closing costs in Canada are separate from the down payment and typically run 1.5–4% of the purchase price. Key items: land transfer tax (provincial; Ontario/BC first-time buyer rebate up to $4,000 in Ontario), legal fees ($1,000–2,000), title insurance ($200–400), home inspection ($400–600), and property tax adjustment at closing. CMHC insurance PST (if applicable) is also paid at closing. Budget at least $15,000–25,000 in closing costs for a $600,000 purchase in Ontario. Read the full <a href="/guides/closing-costs-guide" target="_blank" rel="noopener noreferrer">closing costs guide</a>.
CMHC premium table — 2027
| Down payment % | LTV | Premium rate | On $600,000 loan | Monthly payment impact |
|---|---|---|---|---|
| 5% | 95% | 4.00% | $24,000 added to mortgage | +$136/mo (at 5.5%/25yr) |
| 10% | 90% | 3.10% | $18,600 added | +$106/mo |
| 15% | 85% | 2.80% | $16,800 added | +$95/mo |
| 20%+ | ≤80% | None | $0 | $0 |
External references
- CMHC — Mortgage loan insurance for buyers
- CRA — RRSP Home Buyers' Plan
- FCAC — Mortgage default insurance overview
- Ontario — Land transfer tax and first-time buyer rebate
- Canada — Non-resident property purchase prohibition
Common questions
What is the minimum down payment on a $900,000 home in Canada?
For a $900,000 purchase: 5% on first $500,000 = $25,000 + 10% on $400,000 = $40,000 = $65,000 minimum down payment (7.22%). CMHC insurance applies (the purchase is under $1.5M and down payment is under 20%). The premium on the $835,000 insured loan at 7.22% LTV bracket (90% LTV, 10% down equivalent tier) would be $835,000 × 3.10% = $25,885, added to the mortgage. Use the Canadian mortgage calculator to model monthly payments.
Can I use a gifted down payment for a CMHC-insured mortgage?
Yes — gifts from immediate family members (parents, siblings, grandparents) are eligible. The gift must be accompanied by a signed gift letter confirming the funds are a true gift and not a loan, and showing the donor's account statement. Third-party gifts (employers, friends, non-family) are not eligible. The funds must also meet the 90-day seasoning rule in the donor's account. See CMHC's down payment source rules and the gift funds guide.
Does the RRSP Home Buyers' Plan (HBP) count as an eligible down payment source?
Yes. The RRSP Home Buyers' Plan allows first-time buyers to withdraw up to $35,000 per person from their RRSP (tax-free at withdrawal) to use toward a first home down payment. The amount must be repaid to your RRSP over 15 years; if you miss a repayment year, that year's share is added to your taxable income. The funds must have been in the RRSP for at least 90 days before withdrawal. Couples can each use the HBP for up to $70,000 combined.
What is the first-time home buyer land transfer tax rebate in Ontario?
Ontario first-time buyers receive a rebate on the provincial land transfer tax up to a maximum of $4,000 (covering the full LTT on purchases up to $368,000, partial rebate above that). Toronto imposes an additional municipal LTT with a separate first-time buyer rebate up to $4,475. Combined, Toronto first-time buyers can receive up to $8,475 in land transfer tax rebates. The rebate is applied at closing through your real estate lawyer. Ontario Ministry of Finance LTT page has the full rebate details.
Is 5% down enough to buy a home in Canada in 2027?
Technically yes — for homes under $500,000. But "enough to close" and "financially sound" are different questions. With 5% down on a $500,000 home: down payment $25,000 + CMHC premium $19,000 + closing costs ~$15,000–20,000 = total cash needed ~$59,000–64,000. You carry a $494,000 mortgage (after premium added) at 5.5% for 25 years = ~$3,085/month. The stress test at contract rate + 2% means you must qualify at 7.5% (~$3,656/month). High but achievable in major Canadian cities. The real question is whether the monthly payment is sustainable — use the affordability calculator to check.
Can a non-resident buy property in Canada with a 5% down payment?
No. Foreign buyers are currently prohibited from purchasing residential property in Canada under the Prohibition on the Purchase of Residential Property by Non-Canadians Act (in effect until at least December 2026, with extension expected). Even when permitted, non-resident buyers are not eligible for CMHC-insured mortgages and typically require 35% down with a Canadian chartered bank. Permanent residents and temporary residents meeting specific criteria (work permits, study permits) have different eligibility rules.
Calculate your CMHC premium and monthly payment with the Canadian mortgage calculator, learn about FHSA savings accounts, or read the minimum down payment by city guide.