Down payment

Definition

The amount a buyer puts in upfront, before the mortgage and transaction costs. In Canada the minimum depends on price: 5% of the first $500,000, then 10% of the portion between $500,000 and $1.5 million, and 20% at $1.5 million or more. Example: for a $600,000 property the minimum is $25,000 (5% of $500,000) plus $10,000 (10% of the remaining $100,000), so $35,000, about 5.8% of the price. Below 20%, the mortgage must be insured, which adds a premium to the amount financed. Notary fees and transfer duties are not part of the down payment: budget for them on top.