Mortgages Resource Centre

How Much Do You Need for a Down Payment?

Learn everything you need to know—and how to save up for your new house.

CIBC Sep. 04, 2024 5 minutes-minute read

The funds required to make a down payment on a house can seem overwhelming. First-time home buyers and veteran house hunters alike can experience the same anxiety. But with the right information and a few savings strategies, it doesn’t have to be a source of stress.

Begin by finding out how much down payment you can afford for your new home. The amount of your down payment will influence the property you can afford and the type of mortgage you’ll receive.

Depending on your goal, you may consider ways to save more for your down payment or find alternate funding options. Find out how much you can afford to spend on your mortgage with our mortgage affordability calculator.

Sometimes saving for a down payment is as simple as making small changes to your budget or exploring other financing options. Both could help you save more money and reduce the amount of mortgage you need.

Minimum down payment requirements

There are a few guidelines around how much you need for a down payment for a house in Canada:

For homes that cost up to $500,000, the minimum down payment is 5%
For homes that cost more than $500,000 and less than $1 million, the minimum down payment is 5% of the first $500,000 plus 10% of the remaining balance
For homes that cost $1 million or more, the minimum down payment is 20%

Down payment amounts

Home price	$450,000	$850,000	$1,500,000
First $500,000 x 5%	$22,500	$25,000	N/A
More than $500,000 and less than $1,000,000 x 10%	N/A	$35,000	N/A
More than $1,000,000 x 20%	N/A	N/A	$300,000
Total down payment	$22,500	$60,000	$300,000

Your down payment affects the type of mortgage you get

Your down payment amount determines if you have a conventional mortgage or a high-ratio mortgage. If your down payment is 20% or more of the property value, you'll get a conventional mortgage. If it's less than 20%, you have a high-ratio mortgage, and you may be required to purchase mortgage default insurance.

Mortgage default insurance is an additional insurance payment that protects the lender in case of default. The insurance premium depends on the amount you're borrowing and the percentage of your down payment. Premiums range from 0.6% to 4.5% of the mortgage amount. You can pay for the insurance when you buy it or just add it to your mortgage total¹.

For those who want to avoid this extra fee, it's important to save enough for your down payment to hit that 20% threshold.

How to save for your down payment

Once you’ve determined the amount of the down payment you need, these strategies can help you meet your goal:

Set a monthly savings goal and track your success
Put aside money each month as if you're paying a mortgage already
Save your work bonuses, pay raises and tax refunds
Pay with cash instead of credit cards; you'll generally spend less overall
Reduce your spending by cooking at home instead of eating out, and skip buying the latest gadgets and toys
Find cheaper ways of doing things, such as taking staycations, using coupons and borrowing books from the library

Explore additional savings programs for your down payment

There are local and government programs set up to support first-time home buyers in their journey. These programs are intended to make home ownership in Canada accessible for more people.

Borrow from yourself

First-time home buyers may be eligible for the government's Home Buyers' Plan (HBP)Opens in a popup.. You and your spouse or common-law partner may be eligible to withdraw up to $60,000 each from your Registered Retirement Savings Plan (RRSP), which could help with your home purchase costs.

You won’t pay any tax on the amounts you withdraw if you repay the total amount to your RRSP as required within the next 15 years. The repayment period starts the second year after you make your withdrawals.

Investigate community programs

You can also research various provincial and municipal incentive programs. Some of these programs could help reduce land transfer taxes for first-time home buyers.

Learn more about the Home Buyers’ Plan (HBP) Opens in a new window..

Save up to $40,000 tax-free with the First Home Savings Account

The First Home Savings Account (FHSA) is a registered plan that’s designed to help you save for your first home, tax-free. Your qualifying contributions will be tax-deductible, like a registered retirement savings plan (RRSP). Your qualifying withdrawals will be non-taxable, like a tax-free savings account (TFSA).

You can contribute up to $8,000 annually, including any transfers from an RRSP. The lifetime contribution limit is $40,000. If you qualify to use your savings towards the purchase of a qualifying home, you can withdraw money from your FHSA, tax-free.

You can use savings from your RRSP Home Buyers’ Plan (the HBP) and your FHSA towards the purchase of the same qualifying home purchase.

Learn more about the First Home Savings Account (FHSA) Opens in a new window..

Frequently asked questions

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How much is a mortgage down payment for a first-time home buyer?

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