Minimum Down Payment and Home Buying Programs

Minimum Down Payment Required 


According to the Government of Canada, “The minimum amount you need for your down payment depends on the purchase price of the home.


If your down payment is less than 20% of the price of your home, you must purchase mortgage loan insurance.


Purchase price of your home

Minimum amount of down payment

$500,000 or less

  • 5% of the purchase price

$500,000 to $999,999

  • 5% of the first $500,000 of the purchase price
  • 10% for the portion of the purchase price above $500,000


$1 million or more


  • 20% of the purchase price

If you’re self-employed or have a poor credit history, your lender may require a larger down payment.


Normally, the minimum down payment must come from your own funds. It’s better to save for a down payment and minimize your debts.”


Conventional vs High Ratio Mortgage


A mortgage is either considered a conventional or a high ratio mortgage.  A conventional mortgage is when the mortgage amount divided by the property value is 80% or less.  A high ratio mortgage is when the mortgage amount is greater than 80% of the property value.  High ratio mortgages will require mortgage insurance.  


Home buying programs, plans and incentives


The Government of Canada outlines both the Home Buyer’s Plan and the First-Time Home Buyer Incentive.


Home Buyer’s Plan (HBP) 


“To help you come up with a down payment, you may be eligible for the HBP. The HBP allows you to withdraw up to $35,000, tax-free, from your Registered Retirement Savings Plan (RRSP). You must use this amount to buy or build a qualifying home. You have up to 15 years to repay the amounts you withdraw.


Before you sign up for the HBP, consider:


  • if you can make the repayments
  • if withdrawing funds impacts your retirement savings.

Keep in mind:


  • not making the repayments could end up costing you a lot of money in income tax
  • you may lose out on any growth in your RRSP while the funds are withdrawn.”

Home Buyer’s Tax Credit (HBTC)


First-time home buyers may be eligible for a shared equity mortgage with the Government of Canada. With a shared equity mortgage, the government offers you financing without interest. This helps reduce your monthly mortgage payment without increasing your down payment.


Through the First-Time Home Buyer Incentive, the Government of Canada offers to a first-time home buyer:


  • 5% of the purchase price of an existing home
  • 5% or 10% of the purchase price of a newly constructed home

You need to repay the incentive after 25 years, or when you sell the property. You can also repay it at any time without a prepayment penalty.


The property’s fair market value at the time of repayment will determine the repayment amount.

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