Understand the tiered minimum rules
Down payment tiers work like tax brackets — marginal, not flat. On an $800,000 home you pay 5% on the first $500,000 ($25,000) and 10% on the remaining $300,000 ($30,000) for a total minimum of $55,000. Crossing $500,000 or $1.5 million changes your math significantly.
Build your down payment from registered accounts
The most tax-efficient strategy stacks FHSA (tax-deductible in, tax-free out), RRSP HBP ($60,000 per person), and TFSA savings. A couple can combine up to $200,000 from registered accounts. Lenders require 90-day bank history showing where funds came from.
Decide between minimum down and 20%
Putting 5% down gets you into the market sooner but adds CMHC premiums (2.80%–4.0% of mortgage). Saving to 20% eliminates insurance but takes longer. On a $500,000 home, CMHC adds roughly $19,000 to your mortgage at 5% down — run both scenarios in our mortgage calculator before deciding.
Frequently asked questions
- What is the minimum down payment on a $500,000 home?
- On a $500,000 home, the minimum down payment is $25,000 (5%). CMHC mortgage insurance applies, adding roughly 4% to your mortgage amount. Budget an additional $15,000–$25,000 for closing costs.
- Where can my down payment come from in Canada?
- Acceptable sources include FHSA withdrawals, RRSP Home Buyers' Plan, personal savings, TFSA, and gifts from immediate family (with a gift letter confirming no repayment expected). Lenders require 90-day bank history for down payment funds.
- Do I need 20% down to buy in Canada?
- No. The minimum is 5% on homes up to $500,000. You only need 20% if the home costs $1.5 million or more, or if you want to avoid CMHC mortgage insurance premiums.
- How does CMHC insurance affect my down payment strategy?
- With less than 20% down, CMHC premiums range from 2.80% to 4.0% of the mortgage and are added to your loan. Saving longer to reach 20% eliminates this cost but delays your purchase — use our cost-of-waiting calculator to compare.