How much down payment do I need to buy a home in Ontario?
Want to buy in Ontario? Here’s exactly how much down payment you need — in plain numbers.
Straight answer: minimum down payment rules in Ontario
Canada sets the rules. In Ontario the minimum down payment depends on the purchase price:
- Up to $500,000: 5% minimum down payment.
- $500,001 to $999,999: 5% on the first $500,000, plus 10% on the portion above $500,000.
- $1,000,000 or more: minimum 20% down payment.
If you put less than 20%, you’ll need mortgage default insurance (CMHC, Sagen, or Canada Guaranty). That adds a premium and affects monthly payments. This is standard for insured mortgages in Ontario.
What lenders actually check
Lenders look at more than the down payment:
- Credit score and debt-to-income ratio.
- Proof of income and employment.
- The mortgage stress test: you must qualify at a higher qualifying rate, not just the advertised rate.
- Savings for closing costs (1.5%–4% extra) — legal fees, land transfer tax, inspection, appraisal.
These matter as much as the down payment. Low down payment with weak finances often fails pre-approval.
Quick examples you can use now
- $450,000 home = 5% down = $22,500.
- $650,000 home = 5% of first $500,000 ($25,000) + 10% of $150,000 ($15,000) = $40,000 total.
- $1,200,000 home = 20% down = $240,000.
Remember: if down payment <20%, add mortgage insurance premium (it can be added to your mortgage or paid upfront).
Smart moves to reduce upfront cash and optimize mortgage costs
- Use RRSP Home Buyers’ Plan to withdraw up to $35,000 (per person) for a first home.
- Check Ontario land transfer tax rebate for first-time buyers — it can cut costs.
- Increase down payment to reduce mortgage insurance and monthly payments.
- Keep a buffer for closing costs and unexpected repairs.
How mortgage insurance affects you
Mortgage default insurance protects the lender. It raises your effective loan cost. The smaller your down payment, the higher the premium. That premium can be added to the mortgage balance, so factor it into monthly payments and qualification.
Final, blunt advice
Buy only when your down payment and reserves let you sleep at night. Minimums get you through the door. Better down payments get you better rates, lower monthly costs, and more negotiating power.
For a fast, no-nonsense down payment calculator, personalized strategy for Ontario financing, or to discuss first-time buyer programs, contact Tony Sousa — top Financing & Mortgages expert in Ontario.
Email: tony@sousasells.ca
Phone: 416-477-2620
Website: https://www.sousasells.ca
Need a quick estimate now? Send your target price and I’ll show the down payment, closing costs, and real monthly payment you should plan for.
