| Purchase price | Minimum down payment | Mortgage insurance? |
|---|---|---|
| Up to $500,000 | 5% | Yes, if under 20% down |
| $500,000 to under $1.5 million | 5% of the first $500,000 + 10% of the rest | Yes, if under 20% down |
| $1.5 million or more | 20% | Not available |
These are the federal minimums, set out by the Government of Canada.
What mortgage insurance costs. If you put down less than 20%, your lender requires default insurance (typically CMHC). The premium is a percentage of the mortgage and is usually added to it (CMHC premiums):
| Down payment | Premium |
|---|---|
| 5% to 9.99% | 4.00% |
| 10% to 14.99% | 3.10% |
| 15% to 19.99% | 2.80% |
Two details buyers miss. In Ontario the premium carries 8% provincial sales tax, paid in cash on closing; it can't be added to the mortgage. And a 30-year amortization adds 0.20% to the premium.
Example: a $1.2 million home with the minimum down. Down payment $95,000. Mortgage $1,105,000. Premium at 4.00% is $44,200, added to the mortgage. PST on the premium is $3,536, due in cash on closing.
Should you put down more? More down means a smaller mortgage, a lower premium (or none at 20%) and lower monthly payments. But it isn't automatically better. The right number depends on what else that cash needs to cover: closing costs, a cushion for the unexpected, and the first repairs. That's a conversation for you and your mortgage broker.
Christian's take: I recently spoke with two different buyers who didn't know they could buy with less than 20% down, up to $1.5 million. That one fact instantly changed their math. Don't assume. Ask questions.
