Minimum Down Payment Canada: The Complete Guide for First-Time Buyers

Saving for a down payment is typically the longest lead-time item in the home buying process, and making the wrong strategic choices about how to save, where to save, and how much to put down can cost you tens of thousands of dollars. This complete guide covers the federal down payment rules, explains CMHC insurance clearly, and walks through the best tools available to Canadian first-time buyers for accumulating their down payment efficiently. For the full first-time buyer playbook, see our First-Time Home Buyer Guide for Toronto.

Canada's Minimum Down Payment Rules

Canada's minimum down payment requirements are tiered based on purchase price and set by federal regulation:

• Purchase price $500,000 or less: Minimum 5% down payment required
• Purchase price above $500,000 but below $1.5 million: 5% on the first $500,000 plus 10% on the portion above $500,000
• Purchase price $1.5 million or more: Minimum 20% of the entire purchase price; CMHC homeowner mortgage insurance is unavailable at this threshold

Examples assume an owner-occupied one- or two-unit home, traditional down-payment funds and lender/insurer approval. Other property types or files may require more. The guide to buying in Hamilton works through a $680,000 example. These rules mean the minimum down payment scales with price. For these illustrative purchase prices in Ontario:

• $550,000 home: $30,000 minimum ($25,000 + $5,000)
• $700,000 home: $45,000 minimum ($25,000 + $20,000)
• $850,000 home: $60,000 minimum ($25,000 + $35,000)
• $999,999 home: $74,999.90 minimum ($25,000 + $49,999.90)
• $1,000,000 home: $75,000 minimum ($25,000 + $50,000), subject to insured-mortgage eligibility
• $1,499,999 home: $124,999.90 minimum ($25,000 + $99,999.90), subject to insured-mortgage eligibility
• $1,500,000 home: $300,000 minimum (20% of the whole price)

CMHC Mortgage Default Insurance: What It Costs and Why It Exists

For an eligible owner-occupied purchase below $1.5 million with less than 20% down, mortgage default insurance is generally required. CMHC base premiums for traditional down payments are 4.00%, 3.10% and 2.80% at the usual 5%-under-10%, 10%-under-15% and 15%-under-20% down-payment bands. These assume amortization of 25 years or less; longer amortization or non-traditional funding can change the premium. The insurance protects the lender. Provincial premium tax, where applicable, must be paid separately and cannot be added to the mortgage.

CMHC base premiums for traditional down payments and amortization of 25 years or less, checked October 2, 2026:

• 5.00%–9.99% down payment: 4.00% of the mortgage amount
• 10.00%–14.99% down payment: 3.10% of the mortgage amount
• 15.00%–19.99% down payment: 2.80% of the mortgage amount

For illustration, on a $700,000 purchase the minimum down payment is $45,000 ($25,000 + $20,000), about 6.43%. The base loan is $655,000. At a 4.00% CMHC base premium for a traditional down payment and amortization of 25 years or less, the premium is $26,200 and the mortgage including that premium is $681,200. Ontario provincial sales tax on the premium is payable separately at closing. Interest cost depends on the rate and repayment schedule; no lifetime-interest estimate is assumed here.

The First Home Savings Account (FHSA): Tax Treatment and Limits

The FHSA combines deductible eligible contributions with tax-free qualifying withdrawals. It can be useful for an eligible first-time buyer, within contribution room and withdrawal conditions:

• Contributions are tax-deductible (like an RRSP); eligible deductions can be claimed for the contribution year or carried forward. RRSP transfers and contributions after the first qualifying withdrawal are not deductible
• Withdrawals are tax-free when used for a qualifying first home purchase (like a TFSA)
• Annual contribution limit: $8,000 per year
• Lifetime contribution limit: $40,000 per person across all FHSAs, including RRSP transfers
• Unused room carries forward: Up to $8,000 of unused participation room can carry forward after opening. With $5,000 contributed from $8,000 room in Year 1, $3,000 carries to Year 2, giving $11,000 room before further contributions/transfers, subject to the lifetime limit
• Investments grow tax-free within the account

For a couple buying together, each partner can have their own FHSA, meaning a combined $80,000 in tax-free, tax-deductible savings capacity. Open your FHSA as early as possible: even if you are two years from buying, you are accumulating contribution room from the year you open the account.

FHSA withdrawal checklist: CRA does not require a minimum holding period. A tax-free qualifying withdrawal still requires all of the following:

• Meet the withdrawal first-time-buyer test: you did not live in a home you owned or jointly owned as your principal residence in the current calendar year before withdrawal, excluding the immediately preceding 30 days, or in the four preceding calendar years.
• Have a written agreement to buy or build a qualifying home in Canada, with acquisition or construction completion before October 1 of the year after withdrawal.
• Do not withdraw more than 30 days after acquiring the home.
• Remain a Canadian resident from your first qualifying withdrawal until acquisition, or death if earlier.
• Occupy or intend to occupy the home as your principal residence within one year after buying or building it.
• Give Form RC725 to your FHSA issuer. Check contribution room and any excess amount separately.

Opening eligibility is a separate test. You must be a Canadian resident, at least 18 (or 19 where required to enter a contract), and no older than 71 at year-end. For opening, the current-year and four-preceding-year principal-residence test includes homes owned by you or your current spouse or common-law partner. The withdrawal test concerns your own ownership. Check CRA opening conditions separately.

The RRSP Home Buyers' Plan (HBP)

The RRSP Home Buyers' Plan allows first-time buyers to withdraw up to $60,000 from their RRSP to use as a down payment, tax-free at the time of withdrawal. For a couple, that is $120,000 combined.

The key rules:

• Each participant must meet HBP eligibility independently, including the first-time-buyer test (with specified exceptions), Canadian residency, a written agreement and occupancy intent. The usual ownership test considers the participant and current spouse or common-law partner in the current year before withdrawal, except the preceding 30 days, and four preceding calendar years. A partner who is not withdrawing need not independently qualify for HBP.
• Recent RRSP contributions may be non-deductible under CRA's 89-day rule. This is a deduction restriction, not an automatic ban on a qualifying withdrawal; compare those contributions with the RRSP value remaining afterward.
• The HBP repayment period is up to 15 years. The usual repayment start is the second calendar year after the year of the first HBP withdrawal. Temporary relief now covers first withdrawals in 2022 through 2028 and moves the start to the fifth calendar year after that year. A first withdrawal in 2025 starts repayment in 2030; a first withdrawal in 2026 starts in 2031. The 2026 extension was enacted in June 2026. Check your CRA HBP statement and current rules for the amount due. A repayment shortfall is included in taxable income for the year. Contributions designated as repayments are not deductible.
• The HBP can be used in combination with the FHSA, you can use both programs in the same purchase year

HBP repayment: check your first-withdrawal year

These dates depend on the year of your first withdrawal, not the closing date. Designate repayments on Schedule 7; amounts designated as HBP repayments are not deductible. Your CRA statement gives the required amount. Special situations can change the repayment obligations.

FHSA vs RRSP Home Buyers' Plan vs TFSA: Side-by-Side

Each of the three accounts plays a different role in a Canadian first-time buyer's down payment strategy. Here is how they compare:

Key program rules checked October 2, 2026. FHSA figures are contribution capacity, not withdrawal caps; gains or losses change available balances. Run your specific numbers in our free calculator.

Gifted Down Payments

A non-repayable gift from a relative may be an acceptable down-payment source. Confirm the lender and insurer requirements for the donor, gift letter, transfer evidence and deadline. There is no universal 30- or 90-day gift holding rule stated here; lender source-of-funds documentation is separate from CRA registered-account rules.

• Confirm which relatives and gift sources the lender and insurer permit for this file.
• A gift letter must be signed confirming the funds are a true gift with no expectation of repayment
• Confirm the required transfer date and statement history with the lender.
• Allow time to verify the donor, source of funds and receipt before the lender's deadline.

Keep the gift letter and transfer records together. Ask a licensed mortgage agent which documents the proposed lender requires before relying on the funds.

Non-Traditional Down Payment Sources: What Lenders Accept

Possible sources include the following, subject to lender and insurer acceptance, eligibility and documented origin:

• Proceeds from the sale of a previous property
• RRSP HBP withdrawals (as described above)
• FHSA withdrawals
• Gifts from immediate family members
• Borrowed funds in some circumstances (though this increases your TDS ratio)
• Government grants and programs (available to certain eligible buyers)

For crypto proceeds, borrowed funds or other unusual sources, confirm acceptance and documentation before making an offer. Do not assume that converting money to cash or waiting a set period makes the source acceptable. Some sources remain unsuitable even with a paper trail.

How Much Should You Actually Put Down?

The minimum down payment gets you into the market, but the optimal down payment depends on your specific financial situation, running different scenarios through a mortgage calculator is the fastest way to see how an extra 5% or 10% changes your monthly carrying cost. As a general framework from jenny.mortgage:

1. Compare a 20% down payment with a smaller insured down payment using actual rates, premiums, closing costs and the cash reserve remaining afterward. Waiting also involves rent and uncertainty about prices.
2. If 20% is not realistic on your timeline, 10%–19.99% offers meaningfully lower CMHC premiums than 5%–9.99%
3. A 5% minimum applies only at $500,000 or less. Higher prices below $1.5 million require the two-tier calculation; at $1.5 million or more the minimum is 20% of the whole price. Approval also depends on income, credit, debts and the property.

Frequently Asked Questions

Sources and rule check

Key program rules checked October 2, 2026. Examples are hypothetical and do not establish eligibility or mortgage approval.

• FCAC: minimum down-payment table
• Finance Canada: insured-mortgage reforms
• CMHC: current homeowner insurance requirements
• CMHC: mortgage insurance premiums and provincial tax
• CRA: FHSA opening eligibility
• CRA: FHSA qualifying withdrawals and transfers
• CRA: FHSA participation room
• CRA: FHSA deductions
• CRA: HBP eligibility
• CRA: HBP withdrawals and recent-contribution deductions
• CRA: HBP repayment cohorts and designations
• Finance Canada: enacted 2026 HBP repayment extension
• Income Tax Act: HBP repayment rules, section 146.01

For mortgage insurance eligibility, confirm the current CMHC conditions: the purchase price must be below $1.5 million. Eligibility and premiums also depend on the property, down-payment source and amortization.

Related First-Time Buyer Guides

• First-Time Home Buyer Guide Toronto, the full FTB playbook including stress test, closing costs, and FHSA optimization.
• How Much House Can I Afford in Ontario, the GDS/TDS math behind your qualifying number.
• 2026 Mortgage Stress Test, qualifying rate and how down payment affects qualification.
• Ontario mortgage payment calculator, model how different down payment sizes change your monthly payment.
• Mortgage Agent Toronto, help comparing mortgage options.