What Is the Minimum Down Payment in Canada?
In Canada the minimum down payment is tiered: 5% on the first $500,000 of the purchase price, 10% on the portion between $500,000 and $1.5 million, and at least 20% for homes priced at $1.5 million or more. The $1.5 million cap for insured mortgages took effect December 15, 2024, raised from $1 million (Government of Canada, Department of Finance, 2024). On a $450,000 home the minimum is $22,500. On a $700,000 home it is $45,000. Here is the full math, plus the piece most first-time buyers miss: the down payment you choose also changes the cashback you can receive.
How is the minimum down payment calculated?
Add the tiers together:
- Take 5% of the price up to $500,000.
- Add 10% of any portion between $500,000 and $1.5 million.
- If the price is $1.5 million or more, the tiers no longer apply: the minimum is 20% of the full price.
Worked examples at real Canadian price points:
| Home price | Math | Minimum down payment |
|---|---|---|
| $350,000 | 5% × $350,000 | $17,500 |
| $450,000 | 5% × $450,000 | $22,500 |
| $500,000 | 5% × $500,000 | $25,000 |
| $700,000 | $25,000 + 10% × $200,000 | $45,000 |
| $1,000,000 | $25,000 + 10% × $500,000 | $75,000 |
| $1,500,000 | 20% × $1,500,000 | $300,000 |
Why does putting down less than 20% cost extra?
Because below 20%, your mortgage must be insured against default, and you pay the premium. Mortgage default insurance (often called CMHC insurance, after the largest insurer) protects the lender, not you, and the premium is usually added to your mortgage rather than paid in cash. The premium scales with how little you put down: the closer to the minimum, the higher the rate. This is the real trade-off of a minimum down payment: less cash needed today, a larger insured mortgage carrying an added premium.
Should a first-time buyer put down the minimum?
Many do, and for a practical reason: cash at closing is the tightest constraint most first-time buyers face. Beyond the down payment there are closing costs, moving costs, and the cost of simply starting life in the new home. Putting down the minimum keeps cash in hand for all of it.
There is no single right answer. A larger down payment means a smaller mortgage, no insurance premium at 20%, and less interest over time. A minimum down payment means getting in sooner with money left over. The honest framing: the minimum is the floor the rules allow, not a recommendation. Run both versions of the math before deciding.
How does the down payment change your cashback?
This is the part most buyers have never been told. Home buyer cashback through HiveRewards has two major sides: a realtor side based on the purchase price, and a mortgage side based on the mortgage amount, which is the price minus the down payment. A smaller down payment means a larger mortgage, which means a larger mortgage-side cashback.
On a $450,000 home with the minimum $22,500 down:
| Source of cashback | Approximate amount |
|---|---|
| Realtor-side cashback | $1,620 |
| Mortgage-side cashback | $1,026 |
| Combined total | $2,646 |
Amounts are estimates. Actual cashback depends on the home price, the down payment, and the participating professionals. Full picture: how cashback works when buying a house in Canada. HiveRewards operates across Canada with the exception of Quebec.
What counts as a down payment source?
Lenders and insurers accept several sources, with documentation:
- Your own savings and investments.
- RRSP withdrawals under the Home Buyers' Plan, up to $60,000 per person for first-time buyers (Government of Canada; limit raised from $35,000 in 2024).
- A First Home Savings Account (FHSA), which allows up to $8,000 per year and $40,000 lifetime in contributions (Government of Canada).
- A gift from an immediate family member, with a signed gift letter.
Stacking an FHSA and the Home Buyers' Plan is allowed, and for a couple the combined room can cover most or all of a minimum down payment at typical Canadian prices.
The short version
- 5% to $500,000, 10% on the next portion to $1.5 million, 20% at $1.5 million and above.
- Below 20% down, default insurance applies and you pay the premium.
- The minimum is the floor, not advice. Run the math both ways.
- A smaller down payment means a larger mortgage-side cashback, because that cashback is based on the mortgage amount.
- FHSA plus Home Buyers' Plan is the strongest first-time-buyer stack for building the down payment.