Published April 5, 2021 • 3 Min Read
When buying a home, the purchase price is covered through two main financial sources: Your down payment and your mortgage. But how much do you really need to put down? The short answer is, it depends.
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For properties valued at less than $500,000 you can use 5% down.
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For properties valued between $500,000 and $1 million, the minimum down payment for new insured mortgages increased from 5% to 10% for the portion of the house price above $500,000.
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And for property values over $1 million still require a 20 percent down payment.
Here’s how it works
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You can also calculate your required down payment using the RBC True House Affordability tool, which allows you to see how much home you could prequalify for and the amount of down payment you would require.
Calculate Your Required Down Payment Under The Canadian Rules
Here’s How it Works
Price Tier: Up to $500,000
Down Payment Required: 5% of house price
Price Tier: $500,001 to $999,999
Down Payment Required: 5% of first $500k + 10% portion of house price above $500k
Price Tier: $1,000,000+
Down Payment Required: 20% of house price
What Does This Look Like in Practice?
Read on to see required down payment calculations in action — based on your purchase price tier.
Homes Below $500,000
You need a minimum down payment of 5% of the purchase price. Regardless of home price, a down payment of less than 20% means you’ll require mortgage default insurance.1
Calculate It
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Home Price $400,000
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File bankruptcy papers
Price Tier: Up to $500,000
5% x $400,000 (HOME PRICE) = $20,000 Down Payment
Homes Between $500,001 and $1 million
Homes between $500,001 and $1 million — a common price range for “starter” homes in the Vancouver and Toronto housing markets.1
Calculate It
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Home Price $750,000
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Down Payment: $50,000
Price Tier: $500,001 to $999,999
5% x $500,000 + 10% x $250,000 (HOME PRICE) = $50,000 Down Payment
On a $750,000 home, you’ll need $50,000 for your down payment. This is based on 5% of $500,000, plus another 10% of the amount over $500,000.
So How Much More Do We Need to Put Down?
Increase in down payment required on a $750,000 home is $12,500 ($50,000 is the required down payment).
Homes Over $1 million
If you’re buying a home over $1 million in Canada, you’ll still need at least $20% down.1
Calculate It
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Home Price $1,000,000
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Down Payment: $200,000
Price Tier: $1,000,000+
20% x $1,000,000 (HOME PRICE) = $200,000 Down Payment
Average Home Prices
Metro Vancouver
Average Detached Home Price as of January, 2021: $1,576,8002
City of Toronto
Average Detached Home Price as of January 2021: $1,301,0003
Table of Down Payments by Purchase Price
Under the Canadian minimum down payment rules, this is how much you must put down when buying a home.
| Purchase Price | Minimum Down Payment Price |
|---|---|
| <$500,000 | <$25,000 5% of purchase price |
| $600,000 | $35,000 5% of first $500K + 10% of portion of purchase price above $500K |
| $700,000 | $45,000 5% of first $500K + 10% of portion of purchase price above $500K |
| $800,000 | $55,000 5% of first $500K + 10% of portion of purchase price above $500K |
| $900,000 | $65,000 5% of first $500K + 10% of portion of purchase price above $500K |
| $999,000 | $75,000 5% of first $500K + 10% of portion of purchase price above $500K |
| $1,000,000+ | $200,000 20% of purchase price |
1 https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html
2 https://www.rebgv.org/market-watch/monthly-market-report/january-2021.html
3 https://trreb.ca/files/market-stats/home-price-index/TREB_MLS_HPI_Public_Tables_0121.pdf
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This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
