A down payment is an amount that you put towards purchasing a house. The average down payment on a house depends upon the total purchase value of the house. If you wish to buy a house in Canada, it is recommended that you scour the latest details about Canada’s real estate market. Be it Canada or any other country in the world, there are different yet similar rules to the down payment loans for all home buyers.

Down payment is the initial thing that strikes the home buyer’s mind even before the mortgage approval. As per the Canadian home buying laws, you cannot get the mortgage approval directly without paying a down payment on the property that you wish to purchase.

The down payment is usually a personal saving of a person who wishes to buy a home. So it’s good to save big to pay less in future. This article will explain to you the below pointers:

  • What is the average down payment on a house in Canada?
  • How does down payment affect your mortgage loan insurance?
  • How much of a down payment is right for you?

Let’s begin!

What is the Minimum Down Payment in Canada?

Down Payment in Canada

Down payment is a minimum amount of the total property price that you need to put towards buying a house. The minimum down payment differs from property to property, as each property comes with a different purchase price.

Usually, the bigger the property price, the higher the down payment you need to pay. So first of all, one must understand how the average down payment on a house varies all across Canada.

The price of any home differs, based on its surroundings which include the locality, amenities, and the real estate market condition. These are the conditions that affect the average down payment amount one chooses to pay. On an average at least 5 percent down payment is mandated to pay for all home buyers in Canada.

What is the Maximum Down Payment in Canada?

As per the rules, there is no maximum down payment in Canada that you need to put on a mortgage. Instead, you can also purchase a home right away, if you wish. But if you are moving forward with the down payment procedure, we would suggest you pay as high as you could, because, in return, it reduces the amount of the debt you hold.

The major reason behind putting less down payment is that it is tough and time-consuming to save a hefty amount of money while maintaining your cash flow.

It is recommended to calculate the cost of living at the time when you are saving for the down payment. If it takes years to save a large down payment, you can also put a small down payment to save a mortgage and pay that into your house value despite paying rent.

There are some cases where putting a larger down payment loan is beneficial. In case, if you do not have a good credit history and the mortgage lender is wary of lending you money, you can still buy a property at ease with fewer mortgage loans.

How Much Should You Put Down when Buying a House in Canada?

Buying a House in Canada

Canada is a well-known country that attracts many people to reside in permanently. This is the main reason why the demand for real estate properties is increasing in Canada. Thus, with the increasing demand for real estate, the price of the property is also increasing alongside.

Therefore, the only trick to save money while purchasing a house in Canada is to avoid high mortgage interest rates. It is possible only when you pay a higher down payment because it will help eliminate the load of your mortgage default insurance. Besides reducing the interest amount, it will also help you get a good bid on your mortgage rates from your lender.

A higher down payment can reduce or eliminate the burden of mortgage default insurance. Thus, if you put a large down payment, then you will end up saving a lot of money.

If you find it hard to save a big amount for your down payment, and you are eager to buy a home then putting a lower down payment also works well. It’s always good to know the impact of a lower down payment on your mortgage insurance.

Why Do Canadians Usually Opt for a Higher Down Payment?

Canada provides lower down payment options, still, most home buyers prefer paying a higher down payment. The reason behind putting the higher amount in the front is to pay low interest on the mortgage.

The more you pay upfront, the smaller your loan will be. Most Canadians follow this simple rule to avoid higher interest as it benefits them with lower monthly installments.


Through this guide, you will be able to find out how much down payment you need to purchase a house. Buying a house is a major decision in one’s life and the arrangement of a down payment has a significant impact in driving the home-buying plan.


What is considered a good down payment on a house in Canada?

5 percent is considered as an average down payment in Canada. If you provide less than 20 percent down payment, then you will be required to apply for mortgage default insurance, which is usually known as CMHC insurance in Canada. 

How much down payment for a house do I need to pay in Canada?

Paying at least a 20 percent down payment on a house will increase the probability of your mortgage approval at a decent rate. It will help you avoid mortgage insurance and interest but if you wish, you can still put down less than 20 percent.

What is the minimum down payment that I need to pay when buying a house?

You need a minimum of 5 percent of the total house price to initiate the buying process. But if you are buying a house that costs more than CA $500,000, you will be required to pay an extra 10 percent above your down payment to initiate the buying process of your house. 

Can I put a 5 percent down payment to buy a second home in Canada?

You can put a 5 percent down payment when buying a second home for family, recreation or for any other purpose. 

Can I borrow money for a down payment to buy a house in Canada?

Borrowing money to contribute to your down payment is allowed in Canada. But only if you pay some of the down payment money from your savings. Most Canadians use their personal savings as their primary source of down payment funds when buying a house in Canada.