“How much do I need for a down payment?” is one of the first questions every buyer asks me, and the honest answer is: it depends on the price of the home, not a flat number. Here’s exactly how the math works in Ontario right now.
The Minimum Isn’t One Number, It’s a Sliding Scale
In Canada, the minimum down payment is tiered based on purchase price:
- 5% on the first $500,000 of the purchase price
- 10% on the portion between $500,000 and $1,499,999
- 20% on any amount at $1,500,000 or above
So on a $700,000 home, you’re putting down 5% on the first $500,000 and 10% on the remaining $200,000, not a flat 5% across the whole price. In real dollars, that works out to roughly $35,000 minimum on a $700,000 home and about $45,000 on a $900,000 home.
What Changes If You Put Down Less Than 20%
Any mortgage with less than 20% down is called a high-ratio mortgage, and it legally requires mortgage default insurance, most commonly through CMHC. That insurance protects the lender, not you, and the premium gets added to your mortgage balance rather than paid upfront out of pocket. The less you put down, the higher the premium rate, so a 5% down payment carries a noticeably higher insurance cost than a 15% down payment.
Put down 20% or more and you skip the insurance requirement entirely, which is why a lot of buyers treat 20% as the real target even though it’s well above the legal minimum. It’s not required, it’s just cheaper over the life of the mortgage.
Where the Down Payment Actually Comes From
Very few buyers save the whole amount in a plain savings account. A few tools do a lot of the heavy lifting:
The Home Buyers’ Plan (HBP): lets you withdraw up to $60,000 from your RRSP, tax-free, to put toward a first home. You repay it back into your RRSP over 15 years. Two first-time buyers purchasing together can each use their own $60,000.
The First Home Savings Account (FHSA): a newer account built specifically for this. You can contribute up to $8,000 a year, $40,000 lifetime, contributions are tax-deductible like an RRSP, and withdrawals for a first home are completely tax-free like a TFSA. No repayment required, unlike the HBP.
Gifted funds: down payment money can be gifted from immediate family (parents, grandparents, siblings), as long as it comes with a signed gift letter confirming it’s a true gift with no repayment expected. Most lenders want gifted funds sitting in your account for a few weeks before closing so the source is clearly documented.
What’s the Right Number for You?
Between the tiered minimum, insurance costs, and which of these tools you actually qualify for, the real answer is specific to your price range and situation. It’s also worth pairing this with a real mortgage pre-approval early on, so you know your actual borrowing power before you start seriously looking. And if you’re buying in Toronto specifically, don’t forget to budget for closing costs like land transfer tax, though as a first-time buyer you may qualify for a rebate worth up to $8,475 there too.
I walk every buyer through all of this before they start seriously looking, so there are no surprises at the finance stage. Book a free call and we’ll run your actual numbers together.
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Frequently Asked Questions About Down Payments in Ontario
How much down payment do I need to buy a house in Ontario?
At minimum, 5% on the first $500,000 of the purchase price and 10% on any portion between $500,000 and $1,499,999. On a typical $700,000 GTA home, that’s roughly $35,000 minimum. Putting down 20% or more avoids mortgage insurance entirely.
What happens if I put down less than 20%?
Your mortgage becomes a high-ratio mortgage and requires mortgage default insurance, usually through CMHC. The premium is based on how much you’re putting down and gets added to your mortgage balance rather than paid upfront.
Can I use gifted money for my down payment?
Yes. Immediate family can gift funds toward your down payment as long as you have a signed gift letter confirming it’s a genuine gift with no repayment expected, and the funds are documented sitting in your account before closing.
What government programs can help with my down payment?
The Home Buyers’ Plan lets you withdraw up to $60,000 from your RRSP tax-free (repaid over 15 years), and the First Home Savings Account lets you contribute up to $8,000 a year, $40,000 lifetime, with tax-free withdrawals for a first home. Many buyers use both together.
Do I need the full 20% down to buy a home?
No. The legal minimum is much lower, as little as 5% on lower-priced homes. 20% is a common target because it avoids mortgage insurance costs, but it’s not a requirement to purchase.
Figures current as of 2026 federal and Ontario program rules, checked September 2026. Mortgage insurance premiums, program limits, and eligibility rules can change, always confirm your exact numbers with your lender before making an offer.