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Summary: In Ontario, the minimum down payment is 5% on the first $500,000 of the purchase price and 10% on any portion above that. Homes priced at $1.5 million or more need at least 20%, and any down payment under 20% requires mortgage default insurance.
The down payment is usually the largest amount a buyer pays from their own pocket, and the rules that set the minimum are federal, not something your lender decides. Knowing the tiers early tells you how much to save and whether you will also pay for mortgage insurance.
What is a down payment, and how is it different from the deposit?
A down payment is the share of the purchase price you pay from your own funds, with your mortgage covering the rest. It is easy to confuse with the deposit, which is a separate amount you pay when your offer is accepted, long before closing.
Both reduce what you owe the seller at closing, but they are paid at different times, held by different people, and set by different rules. The deposit is normally credited toward your down payment, so it is not an extra cost stacked on top.
Deposit | Down payment | |
When it is paid | With your accepted offer, often within 24 hours | At closing, through your lawyer |
Typical amount | Around 5% of the price, set by the agreement | 5% to 20% or more, set by federal rules |
Who holds it | The listing brokerage's real estate trust account | Your lawyer's trust account before closing |
What it does | Shows good faith and is credited to your down payment | Reduces the mortgage you borrow |
How much is the minimum down payment in Ontario?
The minimum is 5% on the first $500,000 of the price, 10% on any portion between $500,000 and $1,499,999, and 20% on homes priced at $1.5 million or more. The rules are federal and based on the purchase price, not set by your lender.
Homes priced up to $500,000. 5% of the purchase price.
Homes priced $500,000 to $1,499,999. 5% on the first $500,000, plus 10% on the portion above $500,000.
Homes priced $1.5 million or more. At least 20%, because mortgage default insurance is not available at this price.
On an $800,000 home, the minimum works out to $55,000: 5% of the first $500,000 ($25,000) plus 10% of the remaining $300,000 ($30,000). The $1.5 million insured-mortgage cap took effect on December 15, 2024, raising the old $1 million limit. You can confirm the current tiers on the federal government's down payment page.
What is mortgage default insurance, and when do you need it?
Mortgage default insurance protects your lender if you stop making payments. It is mandatory on a high-ratio mortgage, meaning any purchase where you put down less than 20%. It is provided by the Canada Mortgage and Housing Corporation (CMHC) or a private insurer.
The premium is a percentage of your mortgage amount and is usually added to the loan and paid off over time rather than up front. The less you put down, the higher the rate.
5% to 9.99% down. Premium of about 4.00% of the mortgage amount.
10% to 14.99% down. About 3.10% of the mortgage amount.
15% to 19.99% down. About 2.80% of the mortgage amount.
20% or more down. No insurance is required.
You can check current rates on CMHC's mortgage loan insurance cost page. Note that this insurance protects the lender, not you; it is not the same as mortgage life insurance, which is optional.
Where does your down payment come from, and where does it go?
Lenders accept several sources for a down payment, but they will want to see where the money came from. The funds then move through your real estate lawyer's trust account, not directly to the seller.
Common sources include:
Savings in chequing, savings, or non-registered investment accounts.
A first home savings account (FHSA), which lets eligible first-time buyers contribute up to $40,000 toward a first home, with qualifying withdrawals tax-free. See our guide on saving for a down payment with an FHSA, TFSA, or RRSP.
The RRSP Home Buyers' Plan, which lets eligible first-time buyers withdraw up to $60,000 from their registered savings under the CRA program.
Gifted funds from an immediate family member, backed by a signed gift letter confirming the money does not have to be repaid.
Once you know your source, the money moves through a set path before closing:
Prove your funds. Your lender usually asks for about 90 days of account history to confirm the money is yours.
The deposit goes in first. The deposit you paid with your offer sits in the brokerage's trust account and is credited toward your down payment.
Send the balance to your lawyer. Before closing, you transfer the rest of your down payment to your real estate lawyer's trust account.
Your lawyer closes the deal. On closing day, your lawyer combines your down payment with your mortgage funds, pays the seller, and registers the transfer of title in your name.
Frequently asked questions
Is the minimum down payment different for first-time buyers in Ontario?
No. The minimum is the same for everyone and depends only on the purchase price. First-time buyers get other help, such as land transfer tax rebates and the RRSP Home Buyers' Plan, but not a lower minimum down payment.
Does a larger down payment lower my costs?
Yes. Putting down 20% or more avoids mortgage default insurance premiums and reduces the amount you borrow, which lowers the interest you pay over the life of the mortgage.
Can my whole down payment be a gift?
Often yes, if it comes from an immediate family member and is a genuine gift. Your lender will ask for a signed gift letter confirming the money is not a loan and does not have to be repaid.
Is the deposit part of my down payment?
Usually yes. The deposit you pay when your offer is accepted is applied toward your down payment at closing, so it counts toward the total rather than adding to it.
What happens if I have less than 5% saved?
You cannot get a standard insured mortgage with less than 5% down. You would need to save more, receive a gift, or look at other options before you are able to close on a home.
About the author
Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.
At Ownright, we focus entirely on Ontario residential real estate law. We help homeowners with purchase closings, refinances, and sales, all through a digital platform backed by licensed Ontario lawyers. You can start your closing online or get in touch with any questions.
Legal references: National Housing Act, R.S.C. 1985, c. N-11 (mortgage loan insurance); Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (Home Buyers' Plan and First Home Savings Account); Trust in Real Estate Services Act, 2020, S.O. 2020, c. 1 (brokerage trust accounts).
Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.
