One of the first questions every Ontario home buyer asks is: how much do I need for a down payment? The answer is more nuanced than a single number — it depends on the purchase price, whether you want to avoid mortgage insurance, and what you can realistically afford to put down. Here's a complete breakdown.
Canada has federally mandated minimum down payment requirements that apply to all insured mortgages. The rules are:
For a typical GTA purchase at the current average price of approximately $1,017,796, this means you need a minimum of $203,559 (20%) just to be eligible for financing — since the average price is above $1M. This is one of the most significant barriers to homeownership in the GTA market.
If your down payment is less than 20%, your mortgage must be insured through CMHC (Canada Mortgage and Housing Corporation), Sagen, or Canada Guaranty. This insurance protects the lender — not you — in case you default on the mortgage.
The premium is calculated as a percentage of the insured mortgage amount:
The premium is added to your mortgage balance (you don't pay it upfront). On a $600,000 home with 5% down ($30,000), the insured mortgage is $570,000 and the 4% CMHC premium adds $22,800 to your mortgage — bringing your total mortgage to $592,800.
Putting 20% or more down eliminates CMHC insurance entirely, which saves you thousands of dollars. It also:
In a $900,000 GTA purchase, the difference between 5% down and 20% down is approximately $33,750 in CMHC premiums avoided, plus meaningfully lower monthly payments and tens of thousands less in lifetime interest.
Canadian mortgage rules require that down payment funds come from acceptable sources. The most common are:
Borrowed down payments (including borrowed from friends or family, or from unsecured credit) are generally not acceptable for insured mortgages.
The math is challenging but not impossible. For a $700,000 purchase with 20% down, you need $140,000. Here are some strategies:
First-time buyer tip: The First Home Savings Account (FHSA) is one of the best savings tools available to Canadian first-time buyers. You can contribute up to $8,000 per year (lifetime maximum $40,000), get a tax deduction on contributions, and withdraw everything tax-free for a qualifying home purchase. If you haven't opened one, do it today — even a small contribution starts the clock on your room.
The right down payment for you depends on your purchase price, your savings, and your monthly cash flow. Use our free mortgage calculator and CMHC calculator to model different scenarios for your situation. And if you want to understand what your budget can actually buy in different GTA neighbourhoods, our monthly market report breaks down average prices by property type across the region.