For an eligible owner-occupied home below $1.5 million, start with 5% of the first $500,000 and 10% of the rest. At $1.5 million or more, plan for at least 20%.
Work through a real price
For a $750,000 home, the minimum is $25,000 on the first $500,000 plus $25,000 on the remaining $250,000: $50,000 in total. That is the minimum down payment, not your complete cash requirement.
What changes below 20%?
Mortgage default insurance is usually required when your down payment is less than 20%. It protects the lender. A premium may be added to the mortgage, increasing the amount on which you pay interest. Lenders and insurers assess eligibility separately.
Keep a separate closing-cost budget
Legal fees, property transfer taxes or registration fees, adjustments and other purchase expenses are additional. Where provincial sales tax applies to an insurance premium, that tax cannot be added to the insured loan.
The minimum is not a promise of approval
A lender may require more depending on your credit, income, property or intended use. Rental and commercial financing have different requirements. Confirm the amount and source of funds before making commitments.
Trace the source and timing
Savings, gifts and proceeds from another property require different evidence. A deposit paid before your existing home sells may create a timing gap even if your eventual down payment is sufficient. Ask which funds the lender accepts and what records establish their source before transferring money.
How does this apply to your plans?
No obligation. A personal conversation with Tajwar.
Further reading: FCAC: Down payment requirementsCMHC: Insurance premiums
General information, not a commitment to lend. Mortgage eligibility, costs and terms depend on your circumstances and the lender.