How Much Down Payment Do You Actually Need? (Ontario & Alberta Edition)

Ask five people how much you need to put down on a house and you’ll get five answers, most of them wrong. The “you need 20% down” myth alone has kept thousands of renters renting years longer than necessary.

Here are the actual rules — and the tools that make the number reachable.

The real minimum down payment rules

• Homes up to $500,000: minimum 5% down
• Homes $500,000–$1.5 million: 5% on the first $500K, 10% on the portion above it
• Homes over $1.5 million: minimum 20% (mortgage insurance isn’t available up there)

Quick example: on a $700,000 home, the minimum is $25,000 + $20,000 = $45,000 — about 6.4%, not 20%. On a $450,000 condo in Calgary or Edmonton, it’s just $22,500.

The insurance trade-off (and why it’s not evil)

Under 20% down, your mortgage needs default insurance (CMHC or a competitor). The premium — roughly 3–4% of the mortgage, sliding down as your down payment rises — gets added to the loan, not paid in cash. In exchange, insured mortgages usually get the lowest rates on the market. Waiting years to save 20% while prices and rents climb often costs more than the premium ever would. It’s math, not morality.

Bonus for first-time buyers and new builds: 30-year amortizations are now available on insured mortgages, which lowers your monthly payment and boosts what you qualify for.

The savings tools most buyers underuse

• FHSA — the single best deal in Canadian savings: contribute up to $8,000/year ($40,000 lifetime), deduct it like an RRSP, withdraw it tax-free for a first home. A couple can shelter $80,000.
• RRSP Home Buyers’ Plan — withdraw up to $60,000 per person from your RRSP, tax-free, repay over 15 years. Also stackable per couple.
• Gifted funds — an immediate-family gift is completely acceptable for the down payment; we just document it properly.
• Stack them. FHSA + HBP + gift is how a lot of first buyers get to the number faster than they thought possible.

Ontario vs Alberta: one big difference

Your down payment isn’t the only cash you need at closing — and here the provinces really differ. Ontario charges land transfer tax (Toronto adds a second, municipal one), though first-time buyers get meaningful rebates. Alberta has no land transfer tax at all — just modest registration fees. Full breakdown here: Closing Costs in Ontario & Alberta.

The bottom line

The right question isn’t “how much down payment do I need?” — it’s “what’s my complete path to keys, and when?” Give me your savings picture and target area, and I’ll map it: minimum down, closing cash, qualifying number, and the fastest realistic timeline.

Tyler Salmon — Mortgage Agent Level 2 (Ontario & Alberta), License #M21003803. This post is general info, not advice — every file is different, so let’s talk yours through.

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