How much of a down payment do you need to buy a home in Canada in 2024?

This article has been updated from a previous version.

Despite high house prices across the country, nearly one in five Canadians, particularly those under 35, are considering buying a home in 2024, according to a survey by Ontario-based real estate agency Wahi. 

But aside from finding an affordable home, pulling together a down payment can be the single most challenging aspect of homebuying.  

According to the National Bank of Canada’s housing affordability report, it now takes approximately 67 months, or nearly six years, to save for a minimum down payment on a condo in Vancouver, assuming a 10% savings rate.  

For a house, it takes 449 months of saving, or just over 37 years. And in Toronto, saving for a down payment on a condo takes around 55 months, just under five years, while saving for a detached house takes about 294 months, or nearly 25 years. 

What you choose to put down as a down payment will determine the amount of your mortgage. Let’s take a look at down payment requirements in Canada you need to be aware of.   

How much is a down payment on a house in Canada?  

The average down payment on a house in Canada varies from province to province because the national average home price varies depending on where you live.   

In Canada, the required down payment for a mortgage is determined by the home's purchase price. You're required to put down a certain percentage (or more) of the total buying price of your home.   

The minimum down payment across Canada for homes worth $500,000 or less is 5%, regardless of whether you are a first-time buyer or buying your second property. In other words, a $500,000 home would require a $25,000 down payment.  

After the first $500,000, you’ll be required to pay a 10% down payment on the remainder of your home price. If, for instance, your home is worth $600,000, you’ll need to put down 5% on the first $500,000 (which would be $25,000), and 10% down on the remaining $100,000 (equaling $10,000). This means your total down payment would need to be at least $35,000.  

According to our mortgage payment calculator, if we use the average price for a home in Canada, which, as of October 2024, is $683,200, the minimum down payment will cost you around $43,725. 

But that’s not all you should consider.  

Read more: Does it ever make sense to borrow money for a down payment? 

Down payments and mortgage loan insurance  

One of Canada’s standard down payment rules is that mortgage loan insurance, which is administered by the Canada Mortgage Housing Corporation (CMHC), is required if your down payment is less than 20% of the home’s purchase price.  

Starting December 15, 2024, this insurance will be available for homes priced at up to $1.5 million. Homes priced above this threshold will require a minimum 20% down payment. 

“The insurance that you're paying is more to protect the lender from you defaulting than anything else,” says mortgage broker and LowestRates.ca expert Leah Zlatkin.  

That’s why she suggests coming up with a larger down payment for a house, so you can avoid insurance charges, which can range from 0.6% to 4.5% of the entire loan amount. 

The amount of your down payment will determine your premiums. The closer your down payment is to 20% of your home's worth, the lower your mortgage insurance costs will be.   

The more money you put down, the more negotiating power you'll have with your mortgage lender, too, to get a favourable interest rate on your mortgage.   

"For somebody who is at, say, an 18.5% down payment, it might be worth it to wait a little bit and save another 1.5% so you're not paying that insurance premium,” says Zlatkin. 

 "Whereas if you're at 6% right now, it makes sense for you to buy a house with a minimum down payment if you want to get into the market because there's no way that you're going to be able to get in for a while if you have to wait that long,” she adds. 

Down payment sources  

If you’re a first-time buyer worried about how much down payment you need for a house, look into the government programs and incentives available to you before purchasing a home.  

For instance, the First Home Savings Account (FHSA) lets you save money without paying taxes on what you put in or earn. This can help boost your savings over time. You can put in up to $8,000 a year, with a total limit of $40,000. 

Additionally, the Home Buyer’s Plan (HBP) now allows you to withdraw up to $60,000 tax-free from your RRSP to buy or build a qualifying home for yourself or a disabled relative, as long as you’re a first-time buyer and repay it within 15 years. 

Keep in mind that the down payment must come for “your own resources,” according to CMHC. So, if you’re putting down less than 20% and require mortgage insurance through CMHC, then you must demonstrate that your down payment is not borrowed.  

Increasingly for many young people, homes are purchased with funds from a family member — but only if you can prove that the money is a gift and doesn’t need to be repaid (one way to do that is with a mortgage gift letter from the donor).   

The best time to buy a home is when you’re financially and emotionally prepared to do so. Once you know how much down payment you need for a home, don’t forget to work out what you can actually afford.  

Unfortunately, the down payment is not the only financial hurdle when it comes to homeownership. There are other expenses to keep in mind, such as mortgage payments, closing costs, legal fees, as well as recurring household bills, and general living expenses.  

Read next: 30-year amortizations are now offered on insured mortgages in Canada