Minimum Down Payment

The minimum down payment in Canada is not a single percentage. It is a sliding scale set by federal rules: 5% on the first $500,000, 10% on the slice from $500,000 to $1.5 million, and a hard 20% at $1.5 million and above. This calculator applies that scale to any price and shows both the dollar minimum and the effective percentage — which climbs as the price climbs.

What it answers, and what it doesn't

It answers: the smallest down payment the federal rules allow for a given price and property use, and the resulting loan-to-value that determines your insurance premium bracket.

It does not answer: whether a lender will actually approve you at the minimum (credit, income, and the stress test still apply), whether the minimum is wise (a 5% down payment leaves almost no equity cushion if prices dip), or where the rest of your cash goes — insurers separately require proof of closing costs of at least 1.5% of the price on top of the down payment. The minimum down is a floor with a basement underneath it.

Every input, explained

Purchase price. The full price on the agreement. The scale's kink points are $500,000 and $1,500,000, so precision matters near them: $1,499,999 needs $125,000 down while $1,500,000 needs $300,000. One dollar of price adds $175,000 to the minimum at that cliff. Do not round near a threshold.

Property use: owner-occupied or rental. Non-owner-occupied rental property needs 20% down regardless of price, and mortgage insurance is not available on it at all. Entering a rental as owner-occupied produces a legal-looking answer for a mortgage you cannot get.

Down payment amount (if comparing). Some versions of the calculator let you enter what you have and show whether it clears the minimum and which insurance premium bracket you land in. Enter only funds from acceptable sources — savings, investments, a signed gift letter from immediate family, sale proceeds, FHSA or HBP money.

How the math works

The calculator splits the price into tiers. Tier one: 5% of the first $500,000 ($25,000). Tier two: 10% of everything from $500,000 up to $1,500,000. Tier three: at $1,500,000 or more, the home is no longer insurable, so the minimum becomes a flat 20% of the whole price. It then divides the result by the price to show the effective percentage, which is the number that surprises people — the "5% down" rule is really 5% only on homes at or under $500,000.

Worked example: $925,000 purchase, owner-occupied

• Tier one: 5% × $500,000 = $25,000
• Tier two: 10% × ($925,000 − $500,000) = 10% × $425,000 = $42,500
• Minimum down payment: $25,000 + $42,500 = $67,500
• Effective percentage: $67,500 ÷ $925,000 = 7.3%

The mortgage is $925,000 − $67,500 = $857,500, a loan-to-value of 92.7%, which lands in the 5%-to-9.99% down bracket — so the insurance premium rate is 4.00% of the mortgage amount. And remember the cash pile is bigger than $67,500: insurers want proof of at least 1.5% of the price ($13,875) in closing costs on top, bringing the realistic minimum liquid funds to about $81,375.

For perspective on the top cliff: at $1,499,999 the minimum is $25,000 + $99,999.90 = $125,000 (8.3%). At $1,500,000 it jumps to $300,000 (20%) because insurance is no longer available. Bidding across that line without a plan is a $175,000 mistake.

Provincial quirks and edge cases

The 1.5% proof is the hidden minimum. This trips up more buyers than the down payment scale itself. A buyer who saved exactly 5% has not saved enough — the insurer needs to see the down payment plus roughly 1.5% more for closing costs before the file is approved.

Gifted down payments need paperwork. Gifts from immediate family are acceptable, but they require a signed gift letter stating the money is not a loan. A large unexplained deposit in your bank statements will stall underwriting until it is documented.

Borrowed down payments are a maybe. Some lenders accept borrowed funds for the portion above 5%, but the repayment is counted in your debt ratios. Borrowing the down payment to hit 10% can simultaneously shrink the mortgage you qualify for — run the affordability math with the new debt included.

The $1.5 million cap moved in December 2024. Before 15 December 2024, the insured ceiling was $1 million. The current rules — 10% tier up to $1.5 million, 20% at and above — have applied since then. Older articles quoting the $1 million cap are out of date.

Questions to ask your mortgage broker

1. Do my down payment sources all qualify, and what documentation will underwriting demand for each one?
2. Can I show the required 1.5% closing-cost proof, and does my gift letter cover it or only the down payment?
3. If I stretch to the next premium bracket (10% or 15% down), how much does the lower premium rate save me?
4. For this price, am I anywhere near the $1.5 million insurability cliff, and what happens to my file if the appraisal comes in above it?