Key takeaways
- →Minimum down payment is 5% on the portion of the price up to $500,000, and 10% on the portion between $500,000 and $1,499,999 — not a flat percentage of the whole price.
- →At $1.5 million and above, the minimum jumps to 20%, and mortgage default insurance isn't available at all — the buyer must come up with the full 20%+ from their own resources regardless of how much more they're willing to put down.
- →The most common broker-side error is applying a single flat percentage to the entire purchase price instead of blending the two tiers — it understates the payment on anything over $500,000.
- →The $1.5 million insurability line and the tiered structure below it have applied since December 15, 2024, when the price cap for insured mortgages rose from $1 million.
“5% down” is the number every first-time buyer has heard, and it's correct — up to a point. Above $500,000, Canada's minimum down payment rule blends two percentages rather than applying one flat rate to the whole purchase price, and above $1.5 million the math changes again in a way that catches buyers, and occasionally brokers, off guard.
Here's the tiered rule itself, worked through at several real price points, and the insurability cliff at $1.5 million that has nothing to do with how much a buyer is willing to put down.
01 · What is Canada's minimum down payment rule, exactly?
The minimum down payment is calculated in tiers, not as one flat percentage of the purchase price: 5% on the portion of the price up to and including $500,000, and 10% on the portion from $500,000 up to $1,499,999.99. At $1.5 million and above, the minimum is 20% of the full price, and the property no longer qualifies for mortgage default insurance under any down payment amount.
This structure has applied since December 15, 2024, when the federal government raised the insured-mortgage price cap from $1 million to $1.5 million as part of a broader package that also expanded 30-year amortization eligibility — see our companion piece on who actually qualifies for a 30-year amortization for how the two changes work together.
02 · What's the minimum down payment on a purchase under $500,000?
Below $500,000, the calculation is exactly the flat 5% most buyers already expect — there's no blending because the entire price sits in the first tier.
| Line item | Amount |
|---|---|
| Purchase price | $350,000 |
| Minimum down payment (5% of $350,000) | $17,500 |
| Insured mortgage amount | $332,500 |
03 · How is the down payment calculated between $500,000 and $1.5 million?
This is the tier brokers most often miscalculate: 5% applies only to the first $500,000, and 10% applies to everything above that, up to $1,499,999.99. The two amounts are added together to get the total minimum down payment — the blended rate on the full price ends up somewhere between 5% and 10%, never a flat 10%.
| Line item | Amount |
|---|---|
| First $500,000 × 5% | $25,000 |
| Remaining $250,000 × 10% | $25,000 |
| Total minimum down payment | $50,000 |
| Blended rate on the full price | 6.67% |
| Line item | Amount |
|---|---|
| First $500,000 × 5% | $25,000 |
| Remaining $700,000 × 10% | $70,000 |
| Total minimum down payment | $95,000 |
| Blended rate on the full price | 7.92% |
Notice the blended rate keeps climbing the closer the price gets to $1.5 million — it approaches, but never quite reaches, a flat 10%.
04 · What actually happens at $1.5 million and above?
At a purchase price of $1.5 million or more, the minimum down payment is a flat 20% of the full price, and mortgage default insurance is not available at any down payment size — not for 20%, not for 25%. A buyer at this price point is arranging an uninsured mortgage by definition, which shifts the amortization ceiling, ratio guidelines, and rate onto whatever the individual lender sets, rather than the insured-program rules covered elsewhere on this hub.
| Line item | Amount |
|---|---|
| Minimum down payment (20% of $1,600,000) | $320,000 |
| Mortgage default insurance available? | No — ineligible regardless of down payment size |
This is also the point where the tiered calculation from the section above simply stops applying — there's no blended 5%/10%/20% math above $1.5 million, only the flat 20% floor. For the ratio and documentation side of what changes on an uninsured file, see GDS and TDS, worked.
Get the math right before the offer, not after
Run every down payment calculation the way a lender actually will.
Treadstone's fulfillment associates verify down payment, source of funds, and insurability before a file is submitted — so a client never finds out about the $1.5 million line after they've already made an offer.
05 · What are the most common errors when estimating minimum down payment?
- 01Applying a flat rate to the whole price. Quoting 5% (or 10%) against the full purchase price instead of blending the tiers understates what a client actually needs to bring, sometimes by tens of thousands of dollars on a $700,000–$1.4 million file.
- 02Missing the insurability cliff. A client shopping near $1.5 million needs to understand well before an accepted offer that crossing the line removes insured-mortgage financing entirely — not just raises the down payment percentage.
- 03Forgetting the down payment still needs a documented source. Meeting the minimum threshold on paper doesn't satisfy a lender's source-of-funds review on its own; see the Down Payment Verification & Gift Letters guide for the seasoning and paper-trail rules that apply regardless of tier.
Frequently asked questions
This article is general information to help you scale — not a substitute for tailored advice on your specific business, licensing, or compliance obligations. All figures are illustrative examples for planning purposes; actual costs vary by province, market, and brokerage.