Down Payment Calculator

Your down payment is the upfront cash portion you pay toward purchasing a home. The remaining balance is financed through a mortgage. In Canada, the minimum down payment you need depends on the purchase price of the property, with tiered rules that change at $500,000 and $1,000,000 thresholds.

Canada's Down Payment Rules (2024–2025)

For homes priced at $500,000 or below, the minimum down payment is 5% of the purchase price. For homes between $500,000 and $1,000,000, you need 5% on the first $500,000 and 10% on the amount between $500,000 and $1,000,000. For homes exceeding $1,000,000, the portion above $1,000,000 requires a minimum of 20% down. This means a $1,200,000 home requires at least $195,000 down (5% on the first $500K + 10% on the next $500K + 20% on the remaining $200K).

The $1,000,000 Threshold

The $1M threshold is significant because it creates a substantial jump in required cash. A home at $999,000 needs $74,900 down, while one at $1,001,000 needs $77,700 — and that gap widens fast. At $1.5M, you need $200,000. This is one reason why the Canadian mortgage market has a natural price ceiling around $1M for first-time buyers without significant savings or family help.

CMHC Mortgage Insurance

When your down payment is less than 20%, mortgage default insurance (commonly called CMHC insurance) is mandatory. The premium ranges from 4.0% at 5% down to 2.8% at 15-19.99% down, calculated on the mortgage amount. This premium is typically added to your mortgage balance, so you don't need to pay it in cash — but it does increase your total mortgage and monthly payments. The insurance protects the lender if you default, not you.

Strategies to Build Your Down Payment Faster

• RRSP Home Buyers' Plan (HBP): Withdraw up to $60,000 from your RRSP tax-free. A couple can access $120,000 combined. You have 15 years to repay.
• First Home Savings Account (FHSA): Contribute up to $8,000/year ($40,000 lifetime). Contributions are tax-deductible like an RRSP, and qualifying withdrawals are tax-free like a TFSA.
• TFSA Savings: Use Tax-Free Savings Account room to grow your down payment savings tax-free over time.
• Gifted Down Payments: Parents, grandparents, or siblings can gift funds. You'll need a signed gift letter for the lender.
• Builder Incentives: New construction developers sometimes offer purchase incentives, closing cost credits, or bonus structures.
• Automate Savings: Set up automatic transfers to a dedicated savings account right after each payday.

With 23 years of experience and over $2 billion in funded mortgages, Kraft Mortgages helps buyers across BC, Alberta, and Ontario navigate down payment strategies and find the best mortgage solutions. Call us at 604-593-1550 or visit our office at #301 - 1688 152nd Street, Surrey, BC.