How much is the minimum down payment required to purchase a house in Canada?

A down payment is the amount of money you put toward the purchase of a home. Your lender deducts the down payment from the purchase price of your home. Your mortgage covers the rest of the cost of the house.

The minimum amount you need for your down payment depends on the home's purchase price.

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

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 funds. It’s better to save for a down payment and minimize your debts.

it's advisable to consult with a mortgage professional or financial institution for the most current and accurate down payment requirements.

 How to calculate your minimum down payment?

The calculation of the minimum down payment depends on the purchase price of the home.

If the purchase price of your home is $500,000 or less

Suppose the purchase price of your home is $400,000. You need a minimum down payment of 5% of the purchase price. The purchase price multiplied by 5% is equal to $20,000.

If the purchase price of your home is more than $500,000

Suppose the purchase price of your home is $600,000. You can calculate your minimum down payment by adding 2 amounts. The first amount is 5% of the first $500,000, which is equal to $25,000. The second amount is 10% of the remaining balance of $100,000, which is equal to $10,000. Add both amounts together which gives you a total of $35,000.

it's advisable to consult with a mortgage professional or financial institution for the most current and accurate down payment requirements.

What is mortgage loan insurance?

Mortgage loan insurance protects the mortgage lender in case you can’t make your mortgage payments. It doesn’t protect you. Mortgage loan insurance is also sometimes called mortgage default insurance.

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

Your lender may require that you get mortgage loan insurance, even if you have a 20% down payment. That’s usually the case if you’re self-employed or have a poor credit history.

Mortgage loan insurance isn’t available if:

• the purchase price of the home is $1 million or more
• the loan doesn’t meet the mortgage insurance company’s standards

Your lender coordinates getting mortgage loan insurance on your behalf if you need it.

it's advisable to consult with a mortgage professional or financial institution for the most current and accurate down payment requirements.