This article was originally published on RBC Discover & Learn and has been republished here with permission.

When buying a home, the purchase price is covered through two main financial sources: Your down payment and your mortgage. But how much do you really need to put down? The short answer is, it depends.

 

  • For properties valued at less than $500,000 you can use 5% down.
  • For properties valued between $500,000 and $1 million, the minimum down payment for new insured mortgages increased from 5% to 10% for the portion of the house price above $500,000.
  • And for property values over $1 million still require a 20 percent down payment.

Here's how it works:

how to calculate your required down payment in Canada

Calculate Your Required Down Payment Under The Canadian Rules

Here’s How it Works:

Price Tier: Up to $500,000
Down Payment Required: 5% of house price


Price Tier: $500,001 to $999,999
Down Payment Required: 5% of first $500k + 10% portion of house price above $500k


Price Tier: $1,000,000+
Down Payment Required: 20% of house price


What Does This Look Like in Practice? Read on to see required down payment calculations in action — based on your purchase price tier.

Homes Below $500,000​

You need a minimum down payment of 5% of the purchase price. Regardless of home price, a down payment of less than 20% means you’ll require mortgage default insurance.*

 

Calculate It
Home Price $400,000
Down payment $20,000

Price Tier: Up to $500,000
5% x $400,000 (HOME PRICE) = $20,000 Down Payment

Homes Below $500,001 and $1 million​​

A common price range for “starter” homes in the Vancouver and Toronto housing markets.

 

Calculate It
Home Price: $750,000
Down Payment: $50,000

Price Tier: $500,001 to $999,999
5% x $500,000 + 10% x $250,000 (HOME PRICE) = $50,000 Down Payment
On a $750,000 home, you’ll need $50,000 for your down payment. This is based on 5% of $500,000, plus another 10% of the amount over $500,000.

 

So How Much More Do We Need to Put Down?
Increase in down payment required on a $750,000 home is $12,500 ($50,000 is the required down payment).

Homes Over $1 million

If you’re buying a home over $1 million in Canada, you’ll still need at least $20% down.

 

Calculate It
Home Price: $1,000,000
Down Payment: $200,000

Price Tier: $1,000,000+
20% x $1,000,000 (HOME PRICE) = $200,000 Down Payment

 

Average Home Prices

Metro Vancouver
Average Detached Home Price as of January, 2021: $1,576,8002*

City of Toronto
Average Detached Home Price as of January 2021: $1,301,0003**

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