How Much Down Payment Do I Need to Buy a Home in Canada?
The amount of down payment you need to buy a home in Canada depends on several factors, including the purchase price of the home and the type of mortgage you are getting. As of my last knowledge update in January 2022, here are some general guidelines:
Minimum Down Payment
In Canada, the minimum down payment required is as follows:
For homes with a purchase price of up to $500,000, the minimum down payment is 5% of the purchase price.
For homes with a purchase price between $500,000 and $999,999, the minimum down payment is 5% of the first $500,000 and 10% of the portion of the purchase price above $500,000.
For homes with a purchase price of $1 million or more, a minimum down payment of 20% is required.
Mortgage Loan Insurance
If your down payment is less than 20% of the purchase price, you will typically be required to obtain mortgage loan insurance through the Canada Mortgage and Housing Corporation (CMHC) or other mortgage insurers. This insurance protects the lender in case you default on your mortgage.
High-Ratio vs. Conventional Mortgage
If your down payment is less than 20% of the purchase price, you'll have what's known as a high-ratio mortgage. If your down payment is 20% or more, you'll have a conventional mortgage.
Keep in mind that these guidelines can change, and it's essential to check with a mortgage lender or broker to get the most up-to-date information on down payment requirements. Additionally, the cost of homes in Canada varies by region, so the down payment you need will depend on the local real estate market and property prices in your desired location. It's a good idea to consult with a mortgage professional to determine your specific down payment requirements based on your financial situation and the current housing market conditions.
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