Mortgage down payment requirements in Canada determine the minimum cash you need before a lender will finance the rest of a home purchase, and they also decide whether the mortgage can be insured. The rules vary by purchase price, the source of your funds, and whether you put down less than 20 percent.
Mortgage down payment requirements in Canada are not a single number. Under the federal framework, the minimum down payment rises as the purchase price rises, and the 20 percent threshold separates insured mortgages from uninsured ones. The Financial Consumer Agency of Canada — mortgages explains the consumer side of these rules, while Canada Mortgage and Housing Corporation (CMHC) publishes details about mortgage loan insurance. This guide walks through the minimums, acceptable down payment sources, and the practical difference between insured and uninsured mortgages.
For a home purchased with a federally regulated lender, the minimum down payment is generally calculated in tiers. The table below shows the structure that applies when the mortgage is insurable. Lenders may require more than the minimum, and provincial credit unions may follow different rules.
| Purchase price | Minimum down payment | Insurance status |
|---|---|---|
| Up to $500,000 | 5% of the purchase price | Insurable if other criteria met |
| $500,000.01 to $1,500,000 | 5% on the first $500,000 plus 10% on the portion above $500,000 | Insurable if within the federal price cap and other criteria met |
| Above $1,500,000 | 20% of the purchase price | Uninsured; mortgage loan insurance is generally not available |
How the tiered minimum works with examples
Because the minimum is tiered, the effective down payment percentage rises as the price increases. For a $450,000 home, 5 percent is $22,500. For an $800,000 home, the calculation is $25,000 on the first $500,000 plus $30,000 on the next $300,000, for a total of $55,000. On a $1,200,000 home, it is $25,000 plus $70,000, for a total of $95,000. Above the $1,500,000 insurance cap, a 20 percent down payment is required, so a $1,800,000 home needs at least $360,000 down.
These figures are minimums. A lender can set a higher down payment requirement based on the property type, location, borrower profile, or its own risk appetite. Condominiums, rental properties, and homes in certain markets may face stricter requirements. The Financial Consumer Agency of Canada — loans has general information about borrowing and disclosure that applies alongside mortgage rules.
Acceptable sources of down payment
Lenders want to see that the down payment comes from acceptable, verifiable sources. Common sources include savings, chequing accounts, term deposits, and investments held at a Canadian financial institution. Proceeds from selling an existing home, a vehicle, or other assets can also count if the transaction is documented. Gifted funds from an immediate family member are often allowed, but the lender will usually require a signed gift letter confirming the money does not need to be repaid.
The federal Home Buyers' Plan can allow eligible first-time buyers to withdraw from an RRSP to help fund a down payment, subject to the current published limit and repayment rules. Borrowed funds are treated differently: some lenders may consider a loan or line of credit as part of the down payment, but many will not accept it for the minimum requirement because it adds debt to your application. Cash-back incentives, credit card advances, and unsecured personal loans are generally not accepted as the minimum down payment.
If you are using a co-signer, the source of funds still matters. A co-signer can strengthen the application, but the down payment usually has to be documented in the same way. See what it means to be a co-signer for more on how joint applications affect responsibility.
Insured versus uninsured mortgages
In Canada, a mortgage is usually insured when the down payment is less than 20 percent of the purchase price, the property price is within the federal insurance cap, and the borrower meets the insurer's criteria. The insurance protects the lender if the borrower defaults; it does not protect the borrower. Insurers include CMHC and private insurers. The premium is based on the loan-to-value ratio and amortization, and it is often added to the mortgage balance. CMHC's mortgage loan insurance material explains the insurer's role.
An uninsured mortgage generally means the down payment is 20 percent or more, or the purchase price is above the insurance cap. Uninsured mortgages do not carry a mortgage default insurance premium, but they still have to meet lender and regulatory requirements. Federally regulated lenders apply the OSFI stress test and other underwriting standards to uninsured mortgages as well. The Office of the Superintendent of Financial Institutions (OSFI) publishes the capital and underwriting expectations that shape these loans.
Some borrowers confuse mortgage default insurance with mortgage life insurance or creditor insurance. They are different products. Default insurance is for the lender; life or creditor insurance is optional coverage that may pay off a mortgage after a death or disability, subject to the policy terms.
How lenders verify the down payment
Verification usually happens before the mortgage closes. Lenders and insurers may ask for bank statements covering the previous 90 days, proof of sale for assets, RRSP withdrawal documents, and a gift letter with the donor's information. They may also ask for a down payment confirmation from your lawyer or notary. Large or unusual deposits need a paper trail. If funds have been sitting in an account for less than the required period, the lender may ask where they came from.
Self-employed borrowers, recent immigrants, and borrowers with complex income may face additional documentation. The goal is to confirm that the down payment is real, available, and not borrowed in a way that weakens the mortgage application. Missing or inconsistent documents are a common reason for delays or declined files.
Co-signers, joint borrowers, and down payment gifts
A co-signer or joint borrower can help a buyer qualify by adding income or improving the debt-to-income picture. However, adding a co-signer does not reduce the minimum down payment. The same tiered rules and insurance cap apply. If the co-signer is on title, they are a joint owner; if they are only guaranteeing the loan, the lender's rights and disclosure obligations may differ. The Financial Consumer Agency of Canada has information about disclosure to joint borrowers that is relevant when more than one person is responsible for a debt.
Gifted down payments are common when family members help. The lender will normally require a letter stating the amount, the donor's relationship, and that repayment is not expected. Some lenders also want to see the funds in the borrower's account before closing. If the gift comes from a co-signer, it should be documented just as carefully.
Common mistakes to avoid
- Assuming 5 percent always works. The 5 percent minimum applies only to the first $500,000 of an insurable purchase; higher portions have a 10 percent requirement, and homes above the insurance cap generally need 20 percent.
- Using borrowed money for the minimum down payment without checking lender rules. A loan can increase your debt ratios and may not be accepted as down payment at all.
- Leaving down payment funds in an unsupported account or moving large sums without records. Lenders want a clear 90-day history and a source for any unusual deposit.
- Confusing mortgage default insurance with mortgage life insurance. Default insurance protects the lender and is required on many low-down-payment mortgages; life insurance is optional and separate.
- Forgetting closing costs. Legal fees, land transfer taxes, title insurance, and adjustments are on top of the down payment and must be budgeted separately.
- Adding a co-signer without understanding the obligations. A co-signer may be responsible for the full mortgage if the primary borrower stops paying, and the debt can affect the co-signer's own borrowing capacity. For more context, see bad credit loan considerations and use a loan payment calculator to compare scenarios.
Down payment requirements interact with mortgage affordability, amortization, and the stress test. A larger down payment can reduce the loan-to-value ratio, may avoid default insurance premiums, and can lower the monthly payment. A smaller down payment can get you into a home sooner, but it usually means paying insurance and carrying a larger mortgage. The right balance depends on your budget, income stability, and long-term plans. For the federal consumer framework, start with the Financial Consumer Agency of Canada — mortgages and confirm current rules with your lender or a licensed mortgage professional.