Rising house prices in Canada have put prospective home buyers in jeopardy. Even before you qualify for a mortgage, you’ll need to collect down payment. For every one percent increase in property prices, you’ll have to save extra thousands of dollars towards your down payment. In this article, I’ll walk you through the requirements of a down payment for a house in Ontario, minimum down payment requirements in Ontario, and ways to save down payment quickly. 

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What is a down payment? 

A down payment is the upfront payment you make to purchase your home. While you don’t get it back once your offer is approved, it gets directed towards the total purchase value of your home. 


Collecting down payment is the first step towards homeownership. Every province and territory has rules set on how you can collect down payment and its source. For example, gifted funds from parents and siblings can be used but it can’t be a loan. The mortgage lender will ask you for documents to prove that the funds were a gift. 

Is there a minimum down payment for house in Ontario? 

The amount of down payment you require depends on two factors – price of the house you want to buy and the type of buyer you are.

If you’re a first-time home buyer and want to purchase a property under $500,000, you’ll need 5% down payment. If the property is over $500,000 and under $1,000,000 you’ll have to pay 10% on the remaining amount (property value – $500,000). 

For properties above $1,000,000, you have to pay a flat 20% down payment. These are minimum legal requirements but depending upon your personal situation your mortgage lender might tell you to put down a larger payment. 

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Getting mortgage default insurance

If you’re putting less than 20% down payment, you’ll need to purchase a mortgage default insurance. It protects your mortgage lender in case you are unable to make the monthly payments. The insurance company will pay them the loaned amount back. 

Your insurance premium depends on the amount of down payment. A smaller down payment means a higher insurance premium and vice versa. 

Ways to save for a down payment in Ontario

With property prices rising every month and the mortgage interest rate set to rise in 2022, as a potential buyer you might feel overwhelmed. Here are some tips that will help you save for a down payment faster:

  1. Set up biweekly automatic withdrawal from your checking account into your savings account. Set it up for the day after you get your biweekly salary. That way you wouldn’t see a huge dent in your earnings and save money at the same time.
  2. Curb all unnecessary spending. I know it’s easier said than done but your lifestyle needs to change if you want to buy a house soon. Shop for store brand products instead of branded products from your local grocery store. If you eat out thrice a week, cut it down to only once a week.

As a first-time home buyer in Canada, take advantage of benefits offered by the federal government. I am happy to walk you through the benefits and ways you can get pre-approved for a mortgage in Canada. Book a free consultation with me today.