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.

Down Payment Strategies Canada

Updated for 2026 · Free, unbiased education for Canadian first-time home buyers

Quick Answer

How much down payment do you need in Canada in 2026?

Canada uses tiered minimum down payments: 5% on the first $500,000, 10% on the portion from $500,000 to $1,499,999, and 20% on homes priced at $1.5 million or more. If your down payment is below 20%, CMHC mortgage insurance is required. Funds can come from FHSA, RRSP HBP, savings, or family gifts.

$500K home: minimum $25,000 (5%) plus CMHC insurance
$800K home: minimum $55,000 (5% on first $500K + 10% on remainder)
$1.5M+ home: 20% minimum — no CMHC insurance available
Acceptable sources: FHSA, HBP, TFSA, savings, gifted funds with gift letter

Source: CMHC

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.

Deep-dive guide chapters

Continue learning in our free 8-module guide — each link goes to a detailed chapter with checklists, examples, and calculators.

Down payment rulesTiered minimums with worked examples at every price point CMHC insurance explainedPremium rates by down payment percentage Combined FHSA + HBP strategyMaximize registered-account down payment sources Mortgage pre-approvalConfirm your down payment qualifies before you shop Mortgage calculatorSee how down payment affects payments and CMHC costs Affordability calculatorFind your maximum purchase price at current rates

Frequently asked questions

Related resources from LendCity

FirstHomeGuide.ca is part of the LendCity education network. When you are ready for personalized mortgage guidance — or planning beyond your first purchase — these trusted resources can help.

LendCity MortgagesLicensed mortgage professionals across Canada — pre-approval, rate shopping, and first-time buyer financing with no obligation.Mortgage Renewal HubFree renewal education for when your first mortgage term ends — compare rates, avoid lender auto-renewals, and plan your next term.

How much cash do you actually need?

Canada's tiered down payment rules plus CMHC can change your target. Get a personalized estimate.

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