Your down payment is only one part of the cash needed to buy
A home purchase in Canada usually requires more than the down payment. Buyers often need additional cash for closing expenses such as land transfer tax, legal services, title-related charges, inspections, appraisals and moving costs. These amounts vary by province, municipality and the details of the transaction.
This calculator combines your selected down payment with entered closing costs and an optional emergency reserve. It then subtracts available funding sources to estimate the remaining personal savings target.
The result is not a mortgage qualification. A lender must still verify your funds, income, credit history, property details and ability to repay the proposed mortgage.
Canada’s minimum down-payment tiers
The minimum down payment for a home in Canada depends on its purchase price:
- For homes priced at $500,000 or less, the minimum is 5%.
- For homes above $500,000 but below $1.5 million, the minimum is 5% of the first $500,000 plus 10% of the remainder.
- At $1.5 million or more, the minimum is 20% of the purchase price.
For example, the minimum on a $675,000 home is:
($500,000 × 5%) + ($175,000 × 10%) = $42,500
These are federal minimums. A lender may require a larger down payment depending on the property, credit history, employment circumstances or other underwriting factors.
Review the current rules in the Financial Consumer Agency of Canada’s minimum down-payment guidance.
When mortgage loan insurance enters the calculation
An eligible purchase with a down payment below 20% typically requires mortgage loan insurance (also called mortgage default insurance). This insurance protects the lender if the borrower defaults and a sale does not recover the outstanding debt. It does not insure the buyer.
The premium is generally based on the mortgage amount and the applicable loan-to-value band. A smaller down payment can therefore produce both a larger mortgage and a higher premium rate.
The premium can often be added to the mortgage, in which case interest is charged on it. Some lenders may allow the premium to be paid as a lump sum at closing.
This calculator uses simplified premium bands for planning. Confirm the actual product, eligibility and premium with your lender or insurer. CMHC provides an overview in its mortgage loan insurance explanation.
Provincial tax on the insurance premium
Ontario, Manitoba and Quebec apply provincial sales tax to mortgage loan insurance premiums. According to the Financial Consumer Agency of Canada, this tax cannot be added to the mortgage and must be paid at the time the mortgage is obtained.
The calculator’s premium estimate does not automatically include this tax. Buyers in affected provinces should add it to their closing-cost planning using a current lender or professional estimate.
Personal savings
Savings held outside registered plans can contribute to the down payment and closing costs. Keep statements showing the history and source of funds because lenders may request supporting evidence.
First Home Savings Account
Eligible FHSA holders may make a tax-free qualifying withdrawal for a qualifying first home. Enter only funds expected to be available and eligible at closing.
Home Buyers’ Plan
Eligible participants may currently withdraw up to $60,000 from RRSPs through the HBP. Conditions and repayment obligations apply, so RRSP assets should not automatically be treated as eligible HBP funds.
Gifted funds
A lender may accept a non‑repayable gift from an eligible family member. A signed gift letter and evidence of transfer may be required.
Using an FHSA and the Home Buyers’ Plan together
A buyer may be able to make both a qualifying FHSA withdrawal and an HBP withdrawal for the same qualifying home when all conditions of both programs are met.
The programs operate differently. FHSA withdrawals are not repaid. HBP withdrawals are generally repaid to an RRSP over the applicable repayment period; required amounts not repaid may be included in taxable income.
Review the current CRA FHSA withdrawal rules and CRA Home Buyers’ Plan guidance before relying on either source.
Land transfer tax is not one national amount
Land transfer tax depends on the province, and additional municipal tax may apply in some locations. Rates, exemptions and first‑time‑buyer rebates can depend on the price, location, property type, residency and buyer eligibility.
The calculator therefore accepts a user‑entered amount rather than applying one Canadian rate. Use the relevant provincial or municipal calculator and confirm whether any rebate is received at closing or claimed later.
Why the emergency reserve is shown separately
Using every available dollar for the purchase may leave no cash for moving, repairs, utility connections or an interruption in income. A retained reserve does not form part of the down payment, but it can be an important part of a sustainable purchase plan.
The appropriate reserve varies by household. Entering it separately keeps the chosen amount outside the funds available for closing and makes the complete savings target more visible.
Understanding the savings timeline
When entered funding sources are below the estimated cash goal, the calculator divides the shortfall by the monthly savings contribution to estimate the number of months required.
This simplified timeline does not predict interest earned, investment returns, changes in home prices, changing purchase costs or future program rules. Update the figures regularly as savings and market conditions change.
After comparing down payments, use the Canadian mortgage calculator to estimate repayments and interest for the resulting mortgage.
Canadian down-payment questions
What is the minimum down payment on a $675,000 home
The simplified federal minimum is $42,500: $25,000 on the first $500,000 plus $17,500 on the remaining $175,000.
Can I buy a home in Canada with less than 20% down
An eligible insured purchase below $1.5 million may use the applicable federal minimum. Mortgage loan insurance will typically be required, and the lender and insurer must approve the application and property.
Is the mortgage insurance premium included in my down payment
No. It is a separate cost. The premium may often be added to the mortgage or paid at closing. Provincial sales tax on the premium, where applicable, must generally be paid separately.
Can I use FHSA and HBP money for the same home
Yes, when the purchase and buyer satisfy the separate conditions for a qualifying FHSA withdrawal and an HBP withdrawal. Verify eligibility and timing before relying on either amount.
Can my down payment come entirely from a family gift
A lender may accept an eligible non‑repayable gift, but documentation requirements vary. Obtain the lender’s instructions before transferring or committing the funds.
Does the minimum down payment include closing costs
No. Legal fees, land transfer tax, inspections, appraisal costs, provincial tax on an insurance premium and moving expenses may require additional cash.
Why might a lender require more than the federal minimum
A lender may require a larger down payment because of the property, purchase purpose, mortgage‑insurance eligibility, credit history, income type or another underwriting factor.