One of the first questions people ask when they think about buying a home is: "How much do I need for a down payment?" The good news is, you might not need as much as you think.

The Minimum Down Payment in Canada

Here's the simple breakdown:

  • Homes under $500,000: You need at least 5% down. So for a $400,000 home, that's $20,000.
  • Homes between $500,000 and $1,499,999: You need 5% on the first $500,000 and 10% on the rest.
  • Homes $1,500,000 and above: You need at least 20% down.

That's it. Those are the minimums. You can always put more down if you want, but you don't have to.

Where Can Your Down Payment Come From?

Lenders want to know where your money is coming from. Here are the most common sources:

Your Own Savings

This is the most straightforward option. You save money in a bank account, and when you're ready to buy, you use it. Lenders will typically ask for 3 months of bank statements to verify your savings.

A Gift from Family

In Canada, your immediate family can gift you money for a down payment. You'll need a signed gift letter that says the money is a true gift and doesn't need to be paid back. The gifter will also need to show proof that the money left their account and went into yours.

Your RRSP (First Home Savings)

If you're a first-time buyer, you can withdraw up to $60,000 from your RRSP under the Home Buyers' Plan. You have to pay it back over 15 years, but it's interest-free.

Sale of Another Property

If you're selling a home you already own, the proceeds can be used as your down payment. You'll need the sale contract and your lawyer's contact information.

What About Mortgage Insurance?

If your down payment is less than 20%, you'll need mortgage default insurance. This is sometimes called CMHC insurance. It protects the lender if you can't make your payments.

The cost gets added to your mortgage, so you don't pay it upfront. The less you put down, the higher the insurance premium — but it still makes homeownership possible without waiting years to save 20%.

Tips for Saving Your Down Payment

  • Open a separate savings account — label it "House Fund" so you're less tempted to dip into it.
  • Set up automatic transfers — even $200 a month adds up fast.
  • Use the First Home Savings Account (FHSA) — you get a tax deduction AND the growth is tax-free.
  • Cut one big expense — maybe skip a vacation this year or downsize your car. It sounds hard, but a home is worth it.

You don't need to have everything figured out to start. Even knowing the minimum gives you a target to work toward.

Bottom Line

You might need less than you think. The minimum in Canada starts at just 5%. And there are plenty of ways to come up with that money — savings, gifts, RRSPs, or the sale of a property.

Not sure where you stand? Apply here or give us a call. We'll look at your numbers and tell you exactly how much you need to get started.