Minimum Down Payment and CMHC Insurance in Canada: The Rules, Tier by Tier
The minimum down payment tiers
For an insured mortgage, the minimum down payment is tiered, much like a tax bracket. On homes up to $500,000, the minimum is 5%. On homes between $500,000 and $1,500,000, it is 5% of the first $500,000 — that is $25,000 — plus 10% of the portion above $500,000. So on a $900,000 home the legal minimum is $25,000 plus 10% of $400,000, which comes to $65,000. At $1,500,000 and above, the rules change completely: you need 20% down, and the mortgage cannot be insured at all. Our affordability calculator runs these minimums automatically on any price you enter.
Under 20% down means mortgage insurance
Whenever your down payment is under 20%, the mortgage must be insured — through CMHC or a private insurer. The insurance protects the lender, not you, but it is what makes low-down-payment buying possible. You do not pay the premium as a separate bill: the premium is added to your loan, so it is spread across your payments over the life of the mortgage. That also means the smaller your down payment, the larger the loan and premium you carry — one more reason the minimum is a floor, not a target.
30-year amortizations for first-time buyers and new builds
Most insured mortgages are repaid over a maximum of 25 years, but there is an exception: first-time buyers and buyers of new builds can get 30-year amortizations on insured mortgages. Stretching the same loan over five more years lowers each monthly payment, which can make the difference between passing and failing a lender's affordability test. The trade-off is more interest paid over the full life of the loan, because the balance is outstanding for longer.
Minimum down is not the same as ready to buy
Passing the down-payment minimum only clears the first gate. You still have to pass the stress test — qualifying at the greater of your contract rate plus 2% or 5.25% — and keep your housing and total debt ratios within lender guidelines, up to 39% of gross income for housing (GDS) and 44% for all debts (TDS) on insured mortgages. You also need cash on top of the down payment for closing costs, which typically run about 1.5% to 4% of the price. Budget for all of it before you shop, not after.
A note before you rely on this
This article is general information only, not legal or financial advice. Mortgage rules and figures change — verify the current details at gov.bc.ca and canada.ca before you buy.
Frequently asked questions
What is the minimum down payment on a $900,000 home in Canada?
$65,000. That is 5% of the first $500,000 ($25,000) plus 10% of the remaining $400,000 ($40,000). Because that is under 20%, the mortgage must be insured.
Why do I need 20% down on a home of $1,500,000 or more?
Mortgage insurance is not available at that price level, and an uninsured mortgage requires at least 20% down. Below $1,500,000 you can buy with less, as long as you meet the tiered minimums and the mortgage is insured.
Do I pay the CMHC premium separately?
No. The insurance premium is added to your mortgage loan, so you pay it gradually as part of your regular payments rather than as one upfront bill.
Who can get a 30-year amortization on an insured mortgage?
First-time buyers and buyers of new builds. A 30-year amortization lowers the monthly payment compared with 25 years, at the cost of more total interest over the life of the loan.