The down payment, explained

The minimum down payment in Canada isn't one number. It moves with the price of the home, and putting down anything less than the top tier attaches a real, calculable cost that most buyers only discover partway through a mortgage application. None of it is complicated once the pieces are separated: what the minimum actually requires, what it costs to put down less than the top tier, which accounts to save the money in, and — the harder question — whether spending an extra year or two chasing a bigger number is worth it at all.

That last question has an honest answer, but it isn't a rule of thumb — it depends on your own price range, your own rent, and your own market's direction, which is why the comparison later in this guide runs both paths side by side instead of declaring a winner. Start with the structure, because the size of your down payment decides almost everything downstream of it: the size of the loan, whether that loan needs insurance, and how much of your first years as an owner go to a premium instead of principal.

How much you actually need

The minimum isn't a flat 5% across every price. It's tiered: on the lower slice of a purchase price, the floor is 5% down. Once the price crosses into a higher band, that 5% still applies to the first slice, but the portion of the price above it needs 10% down instead — so the blended percentage required creeps upward as the price climbs, without ever demanding a full 20% until the price clears a much higher ceiling entirely. Above that ceiling, mortgage default insurance isn't available at any down payment size, so the conventional 20% minimum applies outright, and the loan is underwritten differently as a result — no insurer standing behind it, and typically no amortization beyond the standard term either.

The practical effect is that the percentage you need is a function of price, not something you can memorize once and apply everywhere. The down payment calculator works out your exact minimum and blended rate for a specific price, so treat the shape above as the thing to understand and the calculator as the thing to trust for a number. It's worth checking that number against what you can actually carry every month, too, not just what you can put down at closing — affordability and how much house you can afford both start from income and payment capacity rather than price, which is frequently the tighter constraint of the two.

The cost of putting down less than 20%

Anything below the top tier requires mortgage default insurance — commonly called by the name of its largest provider, CMHC, though several private insurers offer the same product. It isn't a formality. The insurer is compensating the lender for the risk of a default with little equity behind it, and the buyer pays for that protection through a premium calculated as a percentage of the loan and rolled directly into the mortgage rather than paid in cash at closing. The premium falls as your down payment rises, in steps rather than smoothly, and the size of each step is worth seeing against one price.

Every row insures the same $500,000 house; only the down payment changes. The drop from step to step isn't even: going from 5% to 10% down saves $5,050 of premium, and from 10% to 15% saves a further $2,050 — but the last step, from 15% to 20%, is worth $11,900 on its own, more than the combined saving of both smaller steps below it. That's the top-tier line doing its work: crossing it doesn't shave the premium down further, it removes the requirement to carry insurance at all. None of this premium is wasted money — it's added to the loan balance and paid down like ordinary principal over the life of the mortgage — but it is real, interest-bearing debt for funds you never actually touched.

Run your numbersMortgage payoff→

Where to save it

Three accounts do different jobs, and the order you fill them in changes how much of your saving avoids tax entirely rather than merely deferring it.

Start with the FHSA. It behaves like an RRSP on the way in — a contribution gets you a deduction the same year — and like a TFSA on the way out, since growth and a qualifying withdrawal toward a first home are never taxed at all. That double benefit exists in no other Canadian account, which is why it belongs first in the order regardless of how far away the purchase feels. Open it even before you're certain of the timeline, because contribution room only starts building once the account exists, not once you decide to buy — the exact annual and lifetime limits, and what happens to the account if you never do buy, are covered in the FHSA guide.

Next comes the Home Buyers' Plan, which lets you pull funds from an existing RRSP toward a first home, untaxed at the moment of withdrawal — but only in the sense that a loan is tax-free the moment it lands in your account. Repayment begins in the second year after the withdrawal and runs on a fixed schedule over 15 years, in equal minimum instalments; budget it as a mandatory line in your post-purchase finances, not as a bonus you already spent. Miss an instalment and nothing extra is charged — the shortfall for that year is simply added to your taxable income instead, quietly undoing part of the deduction you claimed when the money first went in. Two RRSPs in a couple buying together can each be tapped this way, which is often the single largest lever available to a household.

Whatever the FHSA and the Home Buyers' Plan don't cover, the TFSA absorbs without complaint. It carries no repayment schedule, no restriction on what a withdrawal is used for, and no penalty if your plans change and the money ends up somewhere other than a down payment — which makes it the right place for money you're saving but aren't fully certain is house money yet. Fill it after the two accounts that carry a tax benefit specific to housing, not before: a dollar routed through the FHSA or an RRSP earmarked for the Home Buyers' Plan is doing strictly more work than the same dollar parked in a TFSA.

Bigger down payment or buying sooner?

Take a $500,000 home and two buyers who both want it today. Buyer A has $50,000 saved — 10% down — and buys now, financing the $13,950 insurance premium from the table above into a $463,950 loan. Buyer B has the same $50,000 but wants the full 20% before buying, so they keep renting at $2,000 a month while saving the extra $50,000, which takes two years at their pace.

Two years later, Buyer B has the $100,000 they set out to save — but the target moved while they were saving toward it. Assume that market's prices rise a plausible 4% a year: the same home now costs $540,800, and $100,000 buys only about 18.5% down on it, not the 20% they were aiming for. Getting the actual 20% now takes $108,160 — more than they saved. Add up what the wait cost: $40,800 in price growth on a home they still don't own, plus $48,000 of rent that built no equity at all, for $88,800 total. That's more than six times Buyer A's one-time, financed $13,950 premium — and Buyer A has spent two years paying down principal and living in a home that's already worth $40,800 more, while Buyer B is still saving.

That result flips in a flat or falling market, where waiting costs nothing in price growth and the insurance premium becomes the only real number on the table — which is exactly why this is a comparison to run on your own numbers rather than a rule to apply everywhere. Your own rent, your own market's recent direction, and your own timeline for reaching the top tier all belong in it; rent versus buying, honestly walks through the wider version of this trade-off for anyone who hasn't decided to buy at all yet.

Whichever side the comparison lands on for you, the FHSA, the Home Buyers' Plan, and the TFSA in that order remain the fastest route to whichever number you're saving toward — the tax treatment on the way in is the one part of this decision that never depends on what the market does next.