Can I buy a home in Ontario with exactly 5 percent down?

Yes, if the purchase price is $500,000 or less, 5 percent is the legal minimum. Between $500,000 and $999,999 the minimum is blended, 5 percent on the first $500,000 and 10 percent above that. You must also qualify under the stress test and meet lender criteria for income and credit.

Is a bigger down payment always better?

Not always. Reaching 20 percent avoids the insurance premium and lowers your payment, which is valuable. But draining every dollar of savings to hit 20 percent leaves you exposed after closing. Many buyers are better off with a slightly smaller down payment and a healthy emergency fund. We compare both paths with your real numbers.

Can my down payment come from savings, FHSA, and a gift combined?

Yes, combining sources is common. Each source needs documentation: 90 days of statements for savings, FHSA withdrawal forms, RRSP statements for the Home Buyers' Plan, and a signed gift letter for family gifts. Organizing the paper trail early is one of the simplest ways to keep your approval smooth and your closing on schedule.

DOWN PAYMENTS · BY VISHVESH PATEL · NOV 13, 2026

How Much Down Payment Do You Need to Buy a Home in Ontario?

Short answer: In Ontario, the minimum down payment is 5 percent of the first $500,000 of the purchase price, plus 10 percent of the portion between $500,000 and $999,999. If the home costs $1,000,000 or more, you need at least 20 percent down. These are federal rules confirmed by CMHC, and they apply in every province, including Ontario.

The rule, in plain language

Canada's minimum down payment is tiered because expensive homes require more money upfront. CMHC explains it this way: the cheaper the home (up to a point), the smaller the percentage you need. Once a home reaches $1,000,000, mortgage default insurance is no longer available, so lenders require at least 20 percent.

$500,000 or less: 5 percent minimum
$500,001 to $999,999: 5 percent of the first $500,000, plus 10 percent of the rest
$1,000,000 or more: 20 percent minimum

Rules can change, so confirm the exact figures for your purchase when you apply.

Worked examples

Examples make the rule easier to trust than formulas:

$450,000 home: 5 percent of $450,000 = $22,500
$650,000 home: $25,000 (5 percent of $500,000) + $15,000 (10 percent of $150,000) = $40,000
$850,000 home: $25,000 + $35,000 = $60,000
$1,200,000 home: 20 percent = $240,000

What happens when you put down less than 20 percent

If your down payment is under 20 percent, your mortgage must be insured against default. The insurance premium is charged by CMHC or another approved insurer and is usually added to your mortgage balance, so you do not pay it in cash at closing. In exchange, insured mortgages can qualify for lower interest rates, and first-time buyers and buyers of new builds can now amortize an insured mortgage over up to 30 years, which reduces the monthly payment.

Programs that help you reach your down payment

First Home Savings Account (FHSA)

The FHSA lets eligible first-time buyers save up to $40,000 with tax-deductible contributions and tax-free withdrawal for a first home. If you have not opened one, opening an account starts your contribution room accumulating each year.

Home Buyers' Plan (HBP)

The Home Buyers' Plan allows you to withdraw up to $60,000 from your RRSP for a first home, tax-free, as long as you repay it over 15 years. The money must sit in your RRSP for at least 90 days before you withdraw it.

Gifted down payments

Many buyers receive help from immediate family. Lenders accept gifted down payments with a signed gift letter confirming the money is not a loan. Tell your mortgage agent early if a gift is part of your plan, because the paperwork must be right.

Do not forget closing costs

Your down payment is not the only cash you need. Closing costs in Ontario typically add 1.5 to 4 percent of the price, mainly Ontario land transfer tax (plus Toronto's additional tax inside Toronto), legal fees, and adjustments. First-time buyers may receive land transfer tax refunds that reduce this bill. Budgeting for both numbers from the start prevents a stressful closing.

A simple way to build the fund faster

Once you know your target number, automate it. Set a transfer to a separate savings account on every payday, ideally inside your FHSA first so contributions create tax deductions you can reinvest. Keep the money in a safe, boring account rather than investments if you plan to buy within two years, because a market dip at the wrong moment can erase a year of discipline. Review your target every six months, since prices and rules both move, and adjust the monthly amount instead of abandoning the plan.

The bottom line

Run the tiered rule on your target price, add realistic closing costs, then build your savings with the FHSA and Home Buyers' Plan in the right order. If you want the exact figures calculated for your situation, book a free call with me, Vishvesh Patel. There is no cost to you for my service, and you will leave with a clear savings target and timeline.