One of the first questions most buyers ask before purchasing a property is:

How much down payment do you need to buy a home in Ontario?

Your down payment plays a major role in mortgage approval, mortgage affordability, and the type of mortgage you qualify for. The amount you put down affects your monthly payments, whether mortgage insurance is required, and how much home you can afford.

Whether you are a first-time home buyer in Bradford, Barrie, Newmarket, Vaughan, Pickering, Oshawa, Aurora, or anywhere in the Greater Toronto Area, understanding down payment requirements can help you prepare financially and plan your home purchase with confidence.

This guide explains:

• minimum down payment rules in Canada
• how down payments affect mortgage approval
• real examples based on home prices
• strategies to save for a down payment
• tips for first-time home buyers in Ontario

Minimum Down Payment Rules in Canada

In Canada, the minimum down payment required depends on the purchase price of the property.

The federal government sets the following guidelines.

Down Payment Requirements

• 5% down payment for homes priced up to $500,000
• 10% down payment for the portion between $500,000 and $1.5 million
• 20% down payment for homes priced above $1.5 million

If your down payment is less than 20%, mortgage default insurance is required.

This insurance protects the lender in case the borrower cannot repay the mortgage.

Example Down Payment Scenarios

To understand how down payments work in Ontario, let’s look at a few examples.

Example 1 — $500,000 Home

Minimum down payment:

5%

$500,000 × 5% = $25,000 down payment

Example 2 — $700,000 Home

Calculation:

5% on first $500,000 = $25,000
10% on remaining $200,000 = $20,000

Total minimum down payment:

$45,000

Example 3 — $1,000,000 Home

Calculation:

5% of $500,000 = $25,000
10% of remaining $500,000 = $50,000

Total minimum down payment:

$75,000

Do First-Time Home Buyers Need 20% Down?

Many buyers assume they must save 20% down payment before buying a home.

However, that is not always necessary.

Many first-time home buyers in Ontario purchase homes with 5% to 10% down payment depending on the purchase price.

Putting down 20% can offer advantages.

Pros of a Larger Down Payment

• no mortgage insurance required
• lower monthly mortgage payments
• potentially better mortgage rates
• improved mortgage approval chances

Cons

• longer time needed to save
• less liquidity after purchasing the home

For many buyers, entering the housing market sooner with a smaller down payment can be a smart financial decision.

Programs That Help With Down Payments

Several programs can help buyers reach their down payment goals.

First Home Savings Account (FHSA)

The FHSA is the single best down-payment tool in Canada right now. Save up to $8,000 per year ($40,000 lifetime): contributions are tax-deductible like an RRSP, and withdrawals for a qualifying first home are completely tax-free like a TFSA. A couple can shelter up to $80,000 combined. Unused room carries forward, so open the account early — even with a small deposit.

Home Buyers’ Plan (HBP)

First-time home buyers can withdraw up to $60,000 from RRSP savings tax-free to use toward a down payment (the limit was raised from $35,000 in April 2024). You repay it gradually over 15 years.

Gifted Down Payments

Many buyers receive gifted funds from parents or family members.

Most lenders allow gifted down payments as long as documentation confirms the funds are not a loan — a signed gift letter plus proof of the deposit. Lenders also trace 90 days of bank statements for any down payment, so see exactly which documents you’ll need before you apply.

30-Year Amortization for First-Time Buyers

Since December 2024, first-time buyers with an insured mortgage can choose a 30-year amortization instead of 25 — the same down payment buys a lower monthly payment. (Note: the old shared-equity First-Time Home Buyer Incentive was discontinued in March 2024.)

How Down Payment Affects Mortgage Approval

Your down payment is one of the biggest factors lenders evaluate during the mortgage approval process.

Lenders typically review:

• your down payment amount
• your income and employment history
• your debt levels
• mortgage stress test results
• your credit score

Your credit score also plays an important role in mortgage approval and interest rates. Buyers with stronger credit profiles often qualify for better mortgage terms and lender options. If you’re unsure about credit requirements, read our guide on what credit score you need to buy a house in Canada:

/blog/what-credit-score-do-you-need-to-buy-a-house-in-canada

Mortgage Stress Test and Down Payments

In Canada, borrowers must pass the mortgage stress test when applying for most mortgages.

The stress test ensures buyers can still afford their mortgage if interest rates increase.

Borrowers must qualify at the higher of:

• the benchmark qualifying rate (5.25% as of mid-2026)
• their mortgage contract rate plus 2%

Even with a strong down payment, lenders still evaluate:

• income stability
• debt ratios
• credit score history

Working with an experienced mortgage broker in Ontario can help buyers compare multiple lenders and improve their chances of mortgage approval.

Saving for a Down Payment in Ontario

Saving for a down payment is one of the biggest challenges for home buyers.

Here are several strategies to help you reach your goal faster.

1. Automate Your Savings

Set up automatic transfers into a dedicated savings account.

2. Reduce High-Interest Debt

Paying off credit cards and personal loans can free up cash for savings.

3. Increase Household Income

Side income or additional work can accelerate savings.

4. Use Government Programs

Stack the FHSA and the RRSP Home Buyers’ Plan — together they can put well over $100,000 of tax-advantaged savings toward one purchase. Then check what your savings buy with the free affordability calculator and land transfer tax calculator.

Down Payment Requirements in Ontario Cities

Housing prices vary across Ontario.

Buyers purchasing homes in cities like:

Bradford
Barrie
Newmarket
Vaughan
Pickering
Oshawa

may require larger down payments due to higher property values.

Working with a mortgage broker in Ontario can help buyers explore financing options and lender programs suited to their financial situation.

Frequently Asked Questions

How much down payment do you need to buy a home in Ontario?

The minimum down payment depends on the purchase price. Buyers typically need 5% for homes under $500,000, 10% for homes between $500,000 and $1.5 million, and 20% for homes above $1.5 million.

Can I buy a house with 5% down in Ontario?

Yes. Many buyers purchase homes with 5% down payment, particularly first-time home buyers purchasing properties under $500,000.

How much down payment is required for a $700,000 home?

A $700,000 home requires a minimum down payment of $45,000.

Do first-time home buyers need 20% down?

No. Many first-time home buyers purchase homes with 5% to 10% down payment depending on the purchase price.

Can a mortgage broker help with down payment planning?

Yes. A mortgage broker can help buyers explore lender options, government programs, and financing strategies to improve mortgage approval.

Speak With a Mortgage Expert

If you're planning to buy a home and want to understand how much down payment you need, speaking with a mortgage professional can help you plan your purchase with confidence.

Garry Sidhu
Mortgage Broker

🌐 www.garrysidhu.ca
📞 437-961-0004

Serving clients across:

Bradford
Barrie
Newmarket
Vaughan
Pickering
Oshawa
Aurora
GTA
Ontario

Reach out today for a free mortgage consultation — or build your free mortgage plan online in about two minutes. First-time buyer? Start with the printable first-time buyer checklist.

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