How much you actually need down (and the 5/10/15/20 jumps)

Put down less than 20% and Canadian law makes your mortgage carry default insurance. That's the premium CMHC and its two private competitors charge to protect the lender if you stop paying. The price of it moves in cliffs, not a smooth slope, and knowing where those cliffs sit is worth real money when you're deciding how much to put down.

How much down payment do I need in Ontario?

The federal minimum works like this. You put down 5% on the first $500,000 of the price, then 10% on everything above that, up to the $1,500,000 insured cap. Once a home costs more than $1,500,000, insurance isn't available at any price, so 20% down is simply the law.

Up until the cap moved in December 2024, insurance stopped at $1 million. Raising it to $1,500,000opened up a whole range of GTA houses to buyers who don't have 20% saved.

Where the premium jumps

The premium is a percentage of the loan, and which percentage you pay depends on the band your down payment falls into:

These bands work as hard steps. Put down 9.9% and you pay the 4% rate on the whole loan. Put down 10.0% and it drops to 3.1%. Right up against one of those lines, an extra few thousand dollars of down payment can save you thousands more in premium. That's the quick calculation to run before you settle on a number.

Here's how that plays out. Take an $800,000 purchase with 10% down. The loan is $720,000, and the premium runs 3.1% of that, which is $22,320. Push the down payment to 19% and the premium is still 2.8%, now on a $648,000 loan, so $18,144. At 20% down it's zero. Moving from 19% to 20% costs you $8,000 more in down payment and wipes out $18,144 of premium, plus all the interest you'd have paid on that premium over 25 years, because the premium doesn't sit there as a flat fee. It gets rolled into the mortgage and compounds right along with it.

Where the premium hides in your cash flow

The premium itself rolls into the mortgage, so you never write a cheque for it. But Ontario puts an 8% provincial sales tax on that premium, and thatpart you can't finance. On the $22,320 premium above, that's $1,785.60 you need in cash on closing day, and most first-time budgets leave it out. It belongs in the same pile as land transfer tax: money due at closing, no way around it.

One more charge to keep in mind. First-time buyers (and new-build buyers) can stretch to a 30-year amortization on an insured mortgage, but doing that adds 0.20% to the premium. You get a lower monthly payment in exchange for more interest overall and a slightly bigger premium. It's a trade worth working out on paper rather than just falling into.

Deciding your number

• Check how close you are to the next tier.If you're within a few thousand dollars of 10%, 15%, or 20%, closing that gap, whether through the FHSA, the Home Buyers' Plan, or just waiting a while, usually beats anything else you could do with the money.
• Don't drain yourself to zero just to hit a tier. A buyer with 20% down and nothing left in reserve is in a shakier spot than one who put down 15% and kept six months of expenses in the bank. That cushion is also what covers an appraisal gap if the lender values the home below what you offered. The premium is expensive. Being broke in your second month of owning the place is worse.
• Add up the whole closing, not just the down payment. The calculatorpulls the premium tax, land transfer tax, legal costs, and everything else into a single cash-at-closing figure. That's the number that really decides what you can afford to offer.