The short answer
The rule by slice
| Purchase price | Minimum down payment |
|---|---|
| Up to $500,000 | 5% of the price |
| $500,000 to $1,499,999 | 5% of the first $500,000 + 10% of the rest |
| $1,500,000 and over | 20% |
Two examples
The insurance premium
Below 20% down, the loan must be insured. The premium is a percentage of the loan, added to the balance.
| Down payment | Premium (% of the loan) |
|---|---|
| 5% to 9.99% | 4.00% |
| 10% to 14.99% | 3.10% |
| 15% to 19.99% | 2.80% |
At $450,000 with 5% down: a $427,500 loan, a $17,100 premium, a total loan of $444,600. In Quebec the sales tax on the premium is paid in cash and is not added to the loan. A non-traditional down payment, such as a gift, can raise the premium to 4.50% in the 5% tier.
Where the down payment can come from
Savings, RRSP (HBP), FHSA, a gift from a relative with a letter. See the article HBP, FHSA, gift, savings.
Frequently asked questions
Do I need 20% to buy?
No. 5% is possible, with loan insurance.
Is the premium refundable?
No. It is added to the loan and repaid with it.
Does a 3 or 4 unit building need more?
Yes: the minimum down payment there is 10%.