How Much is a Down Payment when Buying a House

Purchasing a home is one of the biggest financial decisions that people make in their lives. While there are a lot of costs involved in buying a house, one of the most significant is the down payment. A down payment is the amount of money that a buyer pays upfront towards the purchase price of a home. In this article, we’ll discuss how much a down payment on a house typically is, what factors impact the down payment amount, and how to prepare for a down payment.

How Much is a Down Payment on a House?

In Canada, the minimum down payment required depends on the purchase price of the home. For homes with a purchase price of up to $500,000, the minimum down payment is 5% of the purchase price. For homes with a purchase price between $500,000 and $999,999, the minimum down payment is 5% of the first $500,000 plus 10% of the amount above $500,000. For homes with a purchase price of $1 million or more, the minimum down payment is 20% of the purchase price.

It’s important to note that if a buyer puts down less than 20% of the purchase price, they will be required to pay mortgage default insurance. This insurance protects the lender in case the borrower defaults on the loan. The cost of this insurance can vary depending on the down payment amount and the value of the home.

Factors That Impact a Down Payment


As in many other countries, the location of the home can impact the down payment required in Canada. For example, in some high-cost areas like Toronto and Vancouver, home prices are significantly higher than in other parts of the country. This means that buyers in these areas may need to put down a larger down payment to qualify for a mortgage.

Type of Property

The type of property being purchased can also impact the down payment required. For example, investment properties and vacation homes may require a larger down payment than a primary residence.

Credit Score

A buyer’s credit score can impact the down payment required. A higher credit score may result in a lower down payment requirement.

Loan Type

The type of loan being used to purchase the home can also impact the down payment required. For example, government-backed loans like those offered by the Canada Mortgage and Housing Corporation (CMHC) may require a smaller down payment.

How to Prepare for a Down Payment

Determine Your Budget

Before beginning the home buying process, it’s important to determine your budget. This includes considering your current financial situation, including your income, expenses, and debt.

Save for a Down Payment

Saving for a down payment can take time, so it’s important to start as early as possible. Setting up automatic savings plans or cutting expenses can help increase savings.

Explore Loan Options

Exploring different loan options can also help buyers find a loan with a lower down payment requirement. In Canada, options like the CMHC’s First-Time Home Buyer Incentive can help make purchasing a home more affordable.

Consider Down Payment Assistance Programs

Some provinces and territories in Canada offer down payment assistance programs for first-time homebuyers. These programs can provide financial assistance to help cover the down payment and closing costs.

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A down payment is a significant upfront cost when purchasing a home in Canada. The minimum down payment required depends on the purchase price of the home and other factors like location, type of property, credit score, and loan type. By understanding the basics of a down payment and preparing accordingly, Canadian buyers can make the home buying process more manageable.

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