How much down payment avoids mortgage insurance?

Putting down 20% or more of the purchase price makes your mortgage conventional and avoids default insurance. Anything less is high-ratio and requires insurance from CMHC, Sagen, or Canada Guaranty.

Can I use my RRSP for a down payment?

Yes. First-time buyers can withdraw up to $60,000 from an RRSP under the Home Buyers' Plan to put toward a down payment, then repay it over time.

Mortgage Glossary

What is Down Payment?

Q: What is the minimum down payment in Canada?

The minimum is 5% on the first $500,000 of the purchase price and 10% on the portion above $500,000. Homes priced at $1 million or more generally require at least 20% down.

A down payment is the portion of a home's purchase price you pay upfront in cash, with the mortgage covering the rest. In Canada, the minimum is 5% on the first $500,000 of the price and 10% on any portion above that. Putting down 20% or more avoids mortgage default insurance.

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Quick answer

Also known as: deposit, down payment amount

Key points

Minimum is 5% on the first $500,000 of the purchase price
An extra 10% applies to any portion above $500,000
Homes at $1 million or more generally need at least 20% down
Under 20% down makes the mortgage high-ratio and requires insurance
A larger down payment lowers your mortgage and interest costs
First-time buyers can use the RRSP Home Buyers' Plan toward it

Down Payment explained

A down payment is the money a buyer contributes from their own funds toward a home purchase, reducing the amount that must be borrowed. The larger the down payment, the smaller the mortgage and the more equity you hold from the start.

Canadian minimums are 5% on the first $500,000 of the purchase price and 10% on the portion above $500,000. Homes priced at $1 million or more generally require at least 20%. A down payment under 20% makes the mortgage high-ratio and requires default insurance.

What a Down Payment is for

The down payment is the buyer's initial stake in the property. It lowers the lender's risk, sets the size of the mortgage, and determines whether default insurance is required, while giving the buyer immediate equity in their home.

How it can help you

A bigger down payment shrinks your mortgage, cuts your interest costs, and can eliminate insurance premiums once you reach 20%. Lenderoo compares 40+ lenders for free, so once you know your down payment you can find the mortgage that makes the most of it.

When it comes up

A first-time buyer combines personal savings with a withdrawal from their RRSP under the Home Buyers' Plan to assemble a down payment large enough to purchase, while keeping monthly payments manageable.

Example: Minimum down payment on a $600,000 home

Maya buys a home for $600,000. The minimum down payment is 5% on the first $500,000, which is $25,000, plus 10% on the remaining $100,000, which is $10,000.

Her minimum total is $35,000. Because this is under 20% of the price, her mortgage is high-ratio and requires default insurance. If she could put down $120,000, she would reach 20% and avoid the insurance.

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Down Payment: frequently asked questions

Common questions Canadians ask about down payment.

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Related mortgage terms

High-Ratio Mortgage

A mortgage with less than 20% down payment requiring insurance.

Read definition

Conventional Mortgage

A mortgage where the down payment is at least 20% of the purchase price

Read definition

Mortgage Insurance

Insurance that protects the lender if a borrower defaults on the mortgage.

Read definition

RRSP Home Buyers' Plan

A federal program that lets eligible buyers withdraw money from their RRSP tax-free to help buy or build a qualifying home.

Read definition

Loan-to-Value Ratio (LTV)

The ratio of the mortgage amount to the property's value, shown as a percentage.

Read definition

Back to full glossary

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Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary

Mortgage Glossary

What is Down Payment?

Find my best mortgage Back to glossary

Quick answer

Also known as: deposit, down payment amount

Key points

Minimum is 5% on the first $500,000 of the purchase price
An extra 10% applies to any portion above $500,000
Homes at $1 million or more generally need at least 20% down
Under 20% down makes the mortgage high-ratio and requires insurance
A larger down payment lowers your mortgage and interest costs
First-time buyers can use the RRSP Home Buyers' Plan toward it

Down Payment explained

What a Down Payment is for

How it can help you

When it comes up

Example: Minimum down payment on a $600,000 home

Maya buys a home for $600,000. The minimum down payment is 5% on the first $500,000, which is $25,000, plus 10% on the remaining $100,000, which is $10,000.

Have a question about down payment?

Lenderoo shops 40+ lenders for free and matches you with a mortgage professional who explains every term — and finds your best rate.

Get pre-approved free Talk to an expert

Questions & answers

Down Payment: frequently asked questions

Common questions Canadians ask about down payment.

Keep learning

Back to full glossary

Understand your mortgage with confidence

Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary