If you’re starting your home-buying journey, one of the first big questions that comes up is: How much is a down payment on a house?
The good news is that the rules in Ontario are straightforward once you break them down. Whether you’re aiming for your first condo, a detached home, or an investment property, here’s exactly how down payments work, what the minimums are, and how to plan for your purchase with confidence.
What is a Down Payment?
A down payment is the amount of money you put toward the purchase of your home up front. The rest is covered by your mortgage.
Think of it as the foundation of your financing. The higher your down payment, the lower your mortgage payments, and the stronger your overall buying position.
Minimum Down Payment Requirements in Ontario
The minimum down payment in Ontario depends on the price of the home. Here’s the breakdown:
Homes up to $500,000
- Minimum down payment: 5%
Homes between $500,000 and $999,999
- Minimum down payment: 5% on the first $500,000, plus 10% on the amount above
Homes $1 Million and up
- Minimum down payment: 20%
Why the big jump at $1 million? Any property at or above this price is not eligible for CMHC mortgage insurance, which is required for down payments under 20%.
What’s the Average Down Payment on a House?
The “average” down payment varies widely depending on the buyer, price point, and market conditions. Across Ontario’s major markets, many first-time buyers put down between 5 and 15%, while move-up buyers and investors often put down 20% or more.
Your ideal number depends on your comfort level, financial goals, and the level of competition in your target neighbourhood.
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Do You Need Mortgage Default Insurance?
If your down payment is under 20%, yes, you will need a mortgage default insurance (often called CMHC insurance).
This insurance protects the lender and gets added to your mortgage, not your upfront closing costs. It also allows buyers with smaller down payments to enter the market sooner.
How Much Should You Aim to Put Down?
Here are a few guiding questions:
- Do you want the lowest possible monthly payment? A larger down payment helps.
- Are you trying to enter the market quickly? The minimum down payment may be enough.
- Is the property over $1 million? You’ll need 20%.
- Are you buying an investment property? Rules may vary depending on your mortgage product.
This is where a personalized strategy makes all the difference, and the Ambler Real Estate Team can talk you through the best approach for your budget and goals.
How to Save for a Down Payment
Saving for a home feels big, but breaking it into small, manageable steps makes it much easier. Here are some helpful strategies:
Open a First Home Savings Account (FHSA)
Allows you to contribute tax-free and withdraw tax-free when you buy your first home. It’s one of the most powerful tools available to buyers in Canada.
Use Your RRSP With the Home Buyers’ Plan
Withdraw up to $60,000 tax-free (per person). You’ll need to repay it over time, but this can be a huge boost.
Automate Your Savings
Set a weekly transfer into a dedicated savings account so it grows without you thinking about it.
Reduce High-Interest Debt
Paying down credit cards and loans frees up cash flow and can help you qualify for a better mortgage.
If you want a full overview of what you need to buy a home in Ontario, including financing, documents, and timelines, check out this guide.
What Else Should You Budget For?
Your down payment is just one part of your upfront costs. Buyers also need to plan for closing costs such as:
- Land transfer tax
- Legal fees
- Home inspection
- Appraisal fees
- Mortgage Insurance (if applicable)
When to Make Your Down Payment
Your down payment isn’t due when you make an offer. You’ll pay your deposit first (usually within 24 hours of an accepted offer). The full down payment is due on closing day, when ownership officially transfers.
Want to find the right Toronto neighbourhood for you? You may find these blogs helpful!
- Best Places To Live In Toronto For Young Professionals
- Best Toronto Neighbourhoods For Families: Luxury Edition
- Best Toronto Neighbourhoods For First Time Buyers
Ready to Start Planning Your Purchase?
Whether you’re buying your first home or moving up to your next one, the Ambler Real Estate Team is here to help you understand your financing options, choose a smart buying strategy, and navigate the market with confidence.
From neighbourhood research to negotiations and closing support, our team makes the buying process clearer and far less stressful. Reach out anytime, we’d love to guide you through your next move.
Heading to the market? Contact us today to schedule a personalized consultation that fits your goals! Call (416-884-8027) or email (team@amblerhomes.com).
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