Minimum down payment in Canada: 2025 rules
Exact minimum down payment requirements for every price range, CMHC premiums, FHSA explained, and the December 2024 rule changes.
How much do you actually need to buy a home in Canada? The answer depends on the purchase price — and the rules changed significantly in late 2024. This guide covers the exact minimum down payment requirements for every price range, how CMHC insurance works, what the new 2024 rule changes mean for buyers, and the smartest ways to save and source your down payment.
The minimum down payment rules in Canada (2025)
Canadian law sets a sliding scale for minimum down payments based on the purchase price of the home. Here are the current rules:
| Purchase price | Minimum down payment | Worked example |
|---|---|---|
| Up to $500,000 | 5% of purchase price | $400,000 home → $20,000 minimum |
| $500,000 – $1,499,999 | 5% on first $500K + 10% on the rest | $700,000 home → $25,000 + $20,000 = $45,000 |
| $1,500,000 and above | 20% of full purchase price (no CMHC) | $1,600,000 home → $320,000 minimum |
Note: CMHC insurance is not available for homes above $1.5 million, which is why the 20% minimum is a hard rule at that level.
The December 2024 rule change — what is new
In December 2024, the Canadian government made two significant changes to mortgage rules that directly affect down payments and buying power:
Change 1 — insured mortgage cap raised to $1.5 million
The maximum purchase price eligible for CMHC-insured mortgages (those with less than 20% down) was raised from $1,000,000 to $1,500,000. This was the first increase since 2012 and directly reflects the reality of home prices in Toronto and Vancouver.
What this means for buyers: If you are buying a home between $1,000,000 and $1,499,999, you can now purchase with less than 20% down — which was previously impossible. A $1,200,000 home now requires a minimum down payment of approximately $95,000 instead of $240,000.
Change 2 — 30-year amortization for first-time buyers on new builds
First-time home buyers purchasing a newly built home can now access 30-year amortizations on insured mortgages (those with less than 20% down). Previously the maximum was 25 years for insured mortgages.
What this means: A 30-year amortization reduces your monthly payment compared to 25 years, making it easier to pass the stress test and qualify for a larger mortgage on a smaller down payment. On a $600,000 mortgage, extending from 25 to 30 years reduces the monthly payment by approximately $280. See our affordability guide for how this interacts with the GDS and TDS rules.
CMHC mortgage insurance — the cost of putting less than 20% down
Any home purchased with less than 20% down requires CMHC mortgage default insurance. This insurance protects the lender (not you) if you default, but you pay the premium. It is added directly to your mortgage balance.
| Down payment | CMHC premium |
|---|---|
| 5% – 9.99% | 4.00% of mortgage |
| 10% – 14.99% | 3.10% of mortgage |
| 15% – 19.99% | 2.80% of mortgage |
| 20% or more | No premium |
Real cost example on a $600,000 home:
- 5% down ($30,000) → mortgage $570,000 → CMHC premium 4% = $22,800 added → total mortgage $592,800
- 10% down ($60,000) → mortgage $540,000 → CMHC premium 3.1% = $16,740 added → total mortgage $556,740
- 20% down ($120,000) → mortgage $480,000 → no CMHC premium → total mortgage $480,000
The CMHC premium is also subject to provincial sales tax in Ontario, Quebec, and Manitoba — paid upfront at closing, not added to the mortgage.
How much down payment do you actually need? Real examples
Here are the minimum down payments required for common purchase prices across Canada in 2025:
| Home price | Minimum down payment | Calculation |
|---|---|---|
| $400,000 | $20,000 | 5% |
| $500,000 | $25,000 | 5% |
| $600,000 | $35,000 | 5% + 10% |
| $700,000 | $45,000 | 5% + 10% |
| $800,000 | $55,000 | 5% + 10% |
| $900,000 | $65,000 | 5% + 10% |
| $1,000,000 | $75,000 | 5% + 10% |
| $1,200,000 | $95,000 | 5% + 10% |
| $1,500,000 | $300,000 | 20% |
| $2,000,000 | $400,000 | 20% |
Where your down payment can come from
Canadian mortgage rules are strict about acceptable sources for your down payment. Lenders will verify the source of every dollar.
Acceptable down payment sources
- Personal savings: Money in your chequing, savings, or investment accounts. Lenders want to see 90 days of bank statements showing the funds have been there — this is called seasoned funds.
- RRSP Home Buyers Plan (HBP): First-time buyers can withdraw up to $35,000 per person ($70,000 per couple) from their RRSP tax-free for a home purchase. The funds must be repaid to your RRSP over 15 years. You must have been a first-time buyer for the previous 4 calendar years.
- First Home Savings Account (FHSA): Introduced in 2023, the FHSA allows first-time buyers to contribute up to $8,000 per year (lifetime maximum $40,000) and withdraw the full amount tax-free for a qualifying home purchase. Unlike the HBP, FHSA withdrawals never need to be repaid. This is the most powerful first-time buyer tool in Canadian history.
- Gift from immediate family: A monetary gift from a parent, sibling, or grandparent is acceptable. The donor must sign a gift letter confirming the funds are a true gift and not a loan. Some lenders require proof the gift has been deposited in your account.
- Sale of another property: Proceeds from selling an existing home or investment property are fully acceptable.
Unacceptable down payment sources
- Borrowed funds: You cannot use a personal loan, line of credit, or credit card cash advance as part of your down payment for an insured mortgage. Lenders check your credit bureau and bank statements specifically for this.
- Unsecured gifts from non-family: Gifts from friends or employers are not acceptable for insured mortgages at most lenders.
- Borrowed HELOC funds on the subject property: You cannot use a HELOC secured against the property you are buying as the down payment source.
The 20% down payment advantage — is it worth waiting for?
Saving 20% down avoids CMHC insurance and reduces your mortgage amount, but it means waiting longer to buy. Here is the real comparison:
Buying now with 5% down on a $700,000 home
- Down payment: $45,000
- CMHC premium: $655,000 mortgage × 4% = approximately $26,200 added
- Total mortgage: approximately $681,200
- Monthly payment at 5.5%: approximately $4,145
Waiting 3 years to save 20% down (assuming home price stays the same)
- Down payment: $140,000
- No CMHC premium
- Total mortgage: $560,000
- Monthly payment at 5.5%: approximately $3,405
- Monthly saving: approximately $740
The catch: If home prices increase by even 3% per year over those 3 years, the $700,000 home becomes approximately $765,000. Your 20% down payment target grows from $140,000 to $153,000 — and you have been paying rent the entire time rather than building equity.
There is no universally right answer. In high-appreciation markets like Toronto and Vancouver, waiting often costs more than the CMHC premium saves. In stable or declining markets, waiting to reach 20% can make financial sense.
First Home Savings Account (FHSA) — the game changer for first-time buyers
The FHSA deserves special attention because it is the most generous government savings tool for home buyers in Canadian history. Here is exactly how it works:
- Who qualifies: Canadian residents who are first-time home buyers (have not owned a home in the current year or the previous 4 calendar years) and are between 18 and 71 years old.
- Annual contribution limit: $8,000 per year
- Lifetime contribution limit: $40,000 per person ($80,000 per couple)
- Tax deduction: Contributions are tax-deductible — exactly like an RRSP. A $8,000 contribution saves approximately $2,400-$3,700 in income tax depending on your province and tax bracket.
- Tax-free withdrawals: Qualifying withdrawals for a home purchase are completely tax-free — unlike RRSP HBP withdrawals which must be repaid.
- Investment growth: Funds inside an FHSA grow tax-free. You can invest in stocks, ETFs, GICs, and mutual funds.
- Combined with HBP: You can use both FHSA and HBP in the same home purchase, giving a couple access to up to $110,000 in tax-advantaged down payment funds ($40,000 FHSA each + $35,000 RRSP HBP each).
If you are a first-time buyer who has not opened an FHSA yet, open one today — even if you only contribute a small amount. The contribution room accumulates and unused room can be carried forward one year.
Provincial land transfer tax — the hidden down payment cost most buyers miss
Your down payment is not the only upfront cash you need. Provincial land transfer tax (LTT) is due at closing and can add tens of thousands of dollars to your required funds.
- Ontario LTT on a $700,000 home: approximately $9,475
- Toronto LTT (city tax, in addition to Ontario): approximately $9,475 (Toronto buyers pay double LTT)
- BC Property Transfer Tax on a $700,000 home: approximately $12,000
- Alberta: no provincial land transfer tax (significant advantage)
- Quebec Welcome Tax on a $700,000 home: approximately $7,500
First-time buyers receive partial or full LTT rebates in Ontario and BC — but only up to certain price thresholds. In Ontario, first-time buyers receive a rebate of up to $4,000 on provincial LTT and up to $4,475 on Toronto LTT.
Always factor land transfer tax into your total upfront cash requirement — it is not included in your down payment but must be paid at closing. For a full breakdown by province see our closing costs guide.
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Calculate down payment and costs for any listingFrequently asked questions
Can I use a personal loan for my down payment in Canada?
No. For insured mortgages (less than 20% down), borrowed funds are not permitted as a down payment source. Lenders check your credit bureau for new credit inquiries and your bank statements for deposits. Using a personal loan as a down payment on an insured mortgage constitutes mortgage fraud.
What is the minimum down payment on a $1,000,000 home in Canada in 2025?
Under the 2025 rules, a $1,000,000 home requires a minimum down payment of $75,000 — 5% on the first $500,000 ($25,000) plus 10% on the remaining $500,000 ($50,000). This home is now eligible for CMHC insurance under the December 2024 rule changes.
Can non-residents buy a home in Canada with 5% down?
No. Non-residents and foreign buyers face additional restrictions including higher minimum down payments (typically 35%) and are subject to the federal foreign buyer ban in most Canadian cities until at least 2027.
Does the down payment minimum change for a condo vs a house?
No. The minimum down payment rules are the same for condos and houses. The purchase price determines the minimum, not the property type.
Can I use my FHSA and RRSP HBP together?
Yes. You can use both in the same home purchase. A couple can access up to $40,000 each from their FHSA plus $35,000 each from their RRSP HBP — a combined $150,000 in tax-advantaged down payment funds.
Do I need the full down payment in my account before getting pre-approved?
Not necessarily. You need to demonstrate you will have the funds available at closing. Lenders will ask for 90-day bank statements showing your savings progress. FHSA and RRSP funds count but must be verifiable.
Down payment rules and government programs change frequently. This article reflects rules as of May 2025. Always confirm current requirements with a licensed mortgage broker before making real estate decisions.