Down Payment Requirements in Canada: How Much Do You Really Need in 2026?

You've found the home you love, your pre-approval looks solid, and now the big question hits: how much cash do I actually need upfront? The answer depends on more than just the purchase price — it's shaped by whether you're a first-time buyer, buying new construction, or purchasing a resale property, and the 2026 rules have changed the game.

This guide breaks down every tier, every exception, and every source of funds Canadian lenders will accept.

Minimum Down Payment by Purchase Price (2026)

Canada uses a tiered system based on the home's purchase price:

Key 2026 Change

As of December 2024, the CMHC insured mortgage limit increased to $1.5 million — but only for first-time buyers and new construction purchases. Resale purchases by repeat buyers remain capped at $1 million for insured mortgages with a maximum 25-year amortization.

First-time buyers and new construction purchasers also gained access to 30-year amortizations on insured mortgages.

CMHC Mortgage Insurance: When It Kicks In

If your down payment is less than 20%, you must purchase mortgage default insurance (commonly called CMHC insurance, though Sagen and Canada Guaranty also provide it). For a deep dive, read our complete CMHC insurance premium guide.

Insurance Premium Rates

Example: On a $600,000 home with 5% down ($30,000), your mortgage is $570,000. The CMHC premium is 4.00% × $570,000 = $22,800, added to your mortgage balance.

This means you're actually borrowing $592,800 — which is why putting down more upfront can save you tens of thousands over the life of the loan.

Who Qualifies for Insured Mortgages?

To use a high-ratio (insured) mortgage in 2026, you must meet these criteria:

• Maximum purchase price: $1.5M (first-time buyers / new construction) or $1M (resale / repeat buyers)
• Maximum amortization: 30 years (first-time / new build) or 25 years (resale / repeat)
• Must pass the stress test at the higher of 5.25% or your rate + 2%
• Property must be owner-occupied

The 20% Threshold: Why It Matters

Putting 20% down eliminates CMHC insurance entirely, which can save you $15,000–$40,000+ depending on purchase price. But there are trade-offs — we break down the full math in our 5% vs 20% down payment comparison.

Advantages of 20%+ Down

• No insurance premium (saves thousands)
• Lower monthly payments
• More equity from day one
• Access to longer amortizations (up to 30 years on conventional)
• More lender options (some only do conventional mortgages)

When Less Than 20% Makes Sense

• You're a first-time buyer and want to enter the market sooner
• Home prices are rising faster than you can save
• You have strong income but limited savings
• You want to keep cash reserves for renovations or emergencies
• New construction with 30-year amortization makes payments affordable

The right answer depends on your complete financial picture. Use our mortgage calculator to compare scenarios.

Acceptable Down Payment Sources

Lenders need to verify where your down payment comes from. Here are the accepted sources:

Fully Accepted Sources

1. Personal savings — Bank statements showing 90-day accumulation history
2. RRSP Home Buyers' Plan (HBP) — Up to $60,000 per person ($120,000 for couples) withdrawn tax-free; must be repaid over 15 years. See our FHSA vs HBP comparison for strategy tips.
3. FHSA (First Home Savings Account) — Tax-free contributions and withdrawals for first-time buyers
4. Gifted funds from immediate family — Requires a signed gift letter confirming no repayment expected
5. Sale of existing property — Equity from a current home sale
6. Non-repayable grants — Government or employer programs (e.g., municipal down payment assistance)

Accepted with Conditions

1. Borrowed down payment (Flex Down) — Some lenders allow borrowed funds, but you must qualify carrying both payments. Limited availability.
2. Equity from another property — Secured line of credit against a property you own

Not Accepted

• Undocumented cash
• Loans from friends (must be immediate family)
• Credit card cash advances
• Cryptocurrency (some lenders now accept if converted 90+ days prior)

For a deeper dive, read our complete guide to acceptable down payment sources.

RRSP Home Buyers' Plan: The $60,000 Advantage

The HBP is one of the most powerful tools for first-time buyers in 2026:

Pro tip: Contribute to your RRSP early in the year, claim the tax deduction, then withdraw under HBP for your down payment. You get the tax refund and the down payment funds.

Combined with the FHSA, a couple could potentially access $200,000+ in tax-advantaged down payment funds.

First-Time Buyer Programs That Boost Your Down Payment

FHSA (First Home Savings Account)

• Contribute up to $8,000/year (lifetime max $40,000)
• Tax-deductible contributions like RRSP
• Tax-free withdrawals like TFSA
• Can combine with HBP

Municipal Programs

Several Canadian cities offer down payment assistance:

• London, ON — Up to $25,000 interest-free forgivable loan
• Various other municipal and provincial programs

Check with your mortgage broker about programs available in your area.

How Much Should You Actually Put Down?

Beyond the minimum, consider these real costs that affect your ideal down payment. Our savings acceleration guide has concrete timelines and strategies.

Closing Costs (Budget 1.5%–4% of Purchase Price)

• Land transfer tax (varies by province)
• Legal fees ($1,500–$2,500)
• Home inspection ($400–$600)
• Title insurance ($300–$500)
• Moving costs
• Immediate repairs or upgrades

Use our closing costs calculator and land transfer tax calculator to get exact numbers.

The "True Minimum" Formula

Down payment + Closing costs + 3-month emergency fund = What you actually need saved

For a $600,000 home with 5% down:

• Down payment: $30,000
• CMHC premium: $22,800 (added to mortgage)
• Closing costs: ~$15,000
• Emergency fund: ~$7,500
• Total cash needed: ~$52,500

Down Payment Strategies by Buyer Type

First-Time Buyers

1. Max out FHSA + RRSP HBP ($60K + $40K = $100K per person)
2. Consider 5% down to enter the market faster
3. Take advantage of 30-year amortization on insured mortgages
4. Check municipal grant programs

Move-Up Buyers

1. Use equity from current home sale
2. Target 20%+ to avoid insurance on the new purchase
3. Consider a bridge loan if timing doesn't align
4. Factor in capital gains exemption on principal residence

Investors

1. Minimum 20% down required (no insurance on rentals)
2. Some lenders require 25%–35% for investment properties
3. Rental income can help qualify, but typically only 50%–80% is counted

Wondering if you can skip the down payment entirely? Read our guide on zero down payment options in Canada.

What's Next

Your down payment is just one piece of the puzzle. Pair it with the right mortgage product, rate, and amortization to build a plan that works for your budget. Connect with a BestRates mortgage specialist to map out your personalized strategy — no obligation, no pressure.