How Much Should You Put Down on a House in Canada?
How Much Should You Put Down on a House? Comparing 5%, 10%, 15%, and 20%
When buying a home, it’s easy to assume that a bigger down payment is always the better choice.
Putting 20% down has clear advantages. You borrow less and generally avoid the mortgage default insurance premium. But getting there takes time, and waiting isn’t automatically the right decision for every buyer.
Sometimes it makes sense to keep saving. Sometimes reaching the next insurance threshold is a worthwhile target. And sometimes buying with a smaller down payment while keeping money available for emergencies better fits your life.
The right decision starts with understanding your options.
You don’t necessarily need 20% down
In Canada, eligible buyers can purchase a home with less than 20% down. The minimum depends on the purchase price:
$500,000 or less: 5%.
More than $500,000 but less than $1.5 million: 5% on the first $500,000, plus 10% on the remainder.
$1.5 million or more: 20%.
When you put less than 20% down, you generally need mortgage default insurance. This insurance protects the lender, and the premium can usually be added to your mortgage. If you finance it, you pay interest on that amount as well. See Canada’s down payment guidelines.
That premium is an important cost—but it’s one part of the decision.
Why the 5%, 10%, and 15% thresholds matter
Mortgage insurance premiums don’t decrease evenly with every extra dollar you put down. There are thresholds where the premium rate drops.
For a standard eligible mortgage, CMHC’s base premium rates are:
Down payment | Premium for amortization up to 25 years | Premium for eligible 30-year amortization |
5% to less than 10% | 4.0% | 4.2% |
10% to less than 15% | 3.1% | 3.3% |
15% to less than 20% | 2.8% | 3.0% |
These percentages apply to the mortgage amount before the premium is added. At 20% down, a standard conventional purchase generally avoids the borrower-paid default insurance premium. See CMHC’s premium schedule.
If you’re sitting at 8% or 9% down, reaching 10% deserves a closer look. The same applies when you’re approaching 15%.
You’re reducing both the amount you borrow and the insurance rate applied to it.
Comparing down payments on a $500,000 home
Let’s assume you’re buying a $500,000 home, qualify for a 30-year insured mortgage, and add the insurance premium to your mortgage.
Down payment | Cash down | Mortgage before insurance | Insurance premium | Starting mortgage |
5% | $25,000 | $475,000 | $19,950 | $494,950 |
10% | $50,000 | $450,000 | $14,850 | $464,850 |
15% | $75,000 | $425,000 | $12,750 | $437,750 |
20% | $100,000 | $400,000 | $0 | $400,000 |
Examples assume a traditional down payment and standard CMHC premiums. Closing costs and applicable provincial tax on insurance premiums are additional. That tax cannot be added to the mortgage. CMHC premium details.
Moving from 5% to 10% down means contributing another $25,000. But your starting mortgage falls by $30,100, because you also save $5,100 in insurance premiums.
Moving from 10% to 15% saves another $2,100 in premiums, alongside the additional $25,000 you put toward the purchase.
At 20%, you avoid the premium in this example. The next question is how long it will take you to reach each milestone—and what that means for the rest of your finances.
Your amortization options affect the decision
Your down payment is only one factor shaping your mortgage payment. The length of time you take to repay the mortgage matters, too.
Eligible first-time buyers and buyers purchasing newly built homes may qualify for insured mortgages with amortizations of up to 30 years. Other buyers putting less than 20% down are generally limited to 25 years.
Extending repayment from 25 to 30 years lowers the required payment for the same mortgage amount and interest rate. However, taking the full additional time to repay the loan increases total interest costs. See Canada’s amortization guidelines.
A longer amortization can be useful for monthly cash flow. The decision should account for both the payment today and the cost over time.
My six-month rule for deciding whether to keep saving
When someone asks whether they should wait for a larger down payment, I ask how long saving the difference will realistically take.
If you’re close to your target and can reach it within six months, waiting may make sense.
If reaching it will take another year or two, the conversation changes.
Unexpected expenses can interrupt your savings. A car repair, a family emergency, or a change in income can push your target further away. Housing prices and mortgage qualification rules can also change while you wait.
That doesn’t mean buying now is always better. Waiting could strengthen your finances, and prices could move in your favour.
My six-month rule is a starting point for comparing your options. If you already have a reasonable down payment and can comfortably afford a suitable home, it’s worth asking whether waiting years to reach 20% supports your goals.
Mortgage rules and housing markets can change
A homebuying plan needs some flexibility.
Mortgage rules have changed in both directions over time. Longer amortizations can lower required payments, while shorter ones can increase them and affect qualification.
The point is not to predict that the rules will become harder. It’s to avoid assuming that the options available today will be identical two years from now.
The same applies to home prices. They can rise, fall, or remain relatively flat. I wouldn’t recommend buying a home solely because someone expects prices to jump next year.
Instead, I’d look at your finances and how long you expect homeownership to be part of your life.
Think about your long-term homeownership plans
If you expect to buy and sell within two years, I’d be cautious. Transaction costs and short-term market movements can have a significant effect on the outcome.
If you expect to remain a homeowner for ten years or longer, that gives us a different planning horizon.
That doesn’t necessarily mean staying in your first house for a decade. You might move as your family, career, or needs change. But each move still brings costs, and a longer timeline doesn’t guarantee a financial gain.
The goal is to make a decision that supports your life beyond the next market headline.
Your budget sets the limit
Everything we’ve discussed comes with one essential condition: you must be able to comfortably afford the home.
A mortgage approval and a personal budget answer different questions.
The lender assesses what you qualify to borrow. Your budget needs to account for what you can manage alongside childcare, transportation, retirement savings, travel, and other priorities.
Include the full cost of owning the property:
Mortgage payments.
Property taxes and home insurance.
Utilities and any condo fees.
Maintenance and repairs.
You also need money for closing costs and an emergency reserve afterward.
If a lender approves you for more than you’re comfortable spending, your own budget should guide the purchase. And if putting 20% down would empty your savings, compare that option carefully with keeping some cash available.
How to choose the right down payment
Before deciding on 5%, 10%, 15%, or 20%, ask yourself:
Can I comfortably afford the full cost of owning this home?
How much money will I have left after closing?
Am I close to a lower insurance premium threshold?
How long would reaching the next threshold—or 20%—take?
Which amortization options am I eligible for?
How does homeownership fit into my long-term plans?
A 20% down payment can be the right choice. So can a smaller down payment that lets you buy a suitable home while maintaining a comfortable budget and emergency savings.
The goal is to choose the amount that makes sense for your full financial picture.
At Mission 35 Mortgages, we’ll walk you through the numbers for 5%, 10%, 15%, and 20% down, explain your mortgage options, and help you understand the trade-offs.
Reach out to our team to build a mortgage plan around your budget, your timeline, and your goals.
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