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 the $500,000 and $1,500,000 thresholds.

Canada's Down Payment Rules (since December 15, 2024)

For homes priced at $500,000 or below, the minimum down payment is 5% of the purchase price. For homes from $500,000 up to $1,500,000, you need 5% on the first $500,000 and 10% on the amount above $500,000. Homes priced at $1,500,000 or more cannot be insured, so they require at least 20% of the full price. This means a $1,200,000 home requires at least $95,000 down (5% on the first $500K + 10% on the remaining $700K).

The $1,500,000 Threshold

Since December 15, 2024, the insured-mortgage price cap is $1.5 million (it was $1 million before). The cap creates a large jump in required cash: a home at $1,499,000 needs $124,900 down, while one at $1,500,000 needs $300,000 — 20% of the full price. Buyers near this threshold should run the numbers carefully before making an offer.

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. In Ontario (and Quebec and Saskatchewan) provincial sales tax on the premium is due in cash at closing. 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 18+ years of combined 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.