Canada's minimum down payment rules are built in tiers tied to purchase price rather than a single flat percentage. For a purchase price below $500,000, the minimum is 5% of the price. Between $500,000 and just under $1.5 million, the minimum is 5% on the first $500,000 plus 10% on the portion above $500,000. At $1.5 million and above, a minimum of 20% is required, and — as Course 01 covers in full — the purchase becomes uninsurable at that point regardless of how strong the rest of the file is.
These tiers apply to owner-occupied properties of one to two units; three- and four-unit owner-occupied properties carry their own flat minimum equity requirement, and non-owner-occupied rental properties are governed by different rules entirely, covered in Course 08, Rental & Investment Property Underwriting.
A purchase at $720,000 falls inside the middle tier. The first $500,000 requires 5%, or $25,000. The remaining $220,000 requires 10%, or $22,000. The total minimum down payment is $47,000 — a blended rate of roughly 6.5% of the total purchase price, noticeably less than a flat 10% would produce, which is precisely the point of the tiered structure: it keeps the entry cost lower for the portion of the price under $500,000 while still requiring more skin in the game on the balance.
This blended-rate effect is worth walking clients through directly, because many assume the tiers work like a tax bracket does at the marginal rate only, or conversely assume a single flat percentage applies to the whole price — neither assumption gives the right number.
A purchase at $1,500,000 or more requires the full 20% down payment and cannot be insured, a hard line rather than a gradual phase-out. A purchase at $1,499,000, one dollar under the threshold, is still eligible under the middle tier — 5% on the first $500,000 ($25,000) plus 10% on the remaining $999,000 ($99,900), for a minimum of $124,900, or roughly 8.3% of the price. That single dollar of difference in purchase price produces a meaningfully different minimum down payment requirement and a different insurance category entirely.
This threshold effect matters in negotiation: a buyer sitting just above $1.5 million with room to negotiate the price down even slightly may unlock a materially lower minimum down payment requirement, which is worth flagging to a client (and their real estate professional) before an offer is finalized, not after.
The standard maximum amortization on an insured mortgage is 25 years, with a 30-year amortization now available specifically for first-time buyers and purchasers of newly built homes on insured mortgages, following the December 2024 reforms. Amortization does not change the minimum down payment requirement itself, but it does change the monthly payment used in the GDS and TDS calculations covered in Course 05 — worth remembering that down payment sufficiency and debt-service sufficiency are two separate tests a file has to clear, not one.
A borrower can meet the minimum down payment comfortably and still be constrained by debt-service ratios, or vice versa — a larger down payment reduces the mortgage principal and therefore helps the ratios, but it is not itself a debt-service calculation, which is why both this course and Course 05 exist as distinct subjects rather than one combined topic.
A property is purchased for $900,000. What is the minimum required down payment?
The tiered structure requires 5% on the first $500,000 ($25,000) plus 10% on the remaining $400,000 ($40,000), for a total of $65,000. A flat 5% ignores that the tier above $500,000 requires the higher 10% rate on that portion. A flat 10% overstates what is owed on the first $500,000. And the 20% requirement only applies at $1.5 million and above, well beyond this purchase price — a common overcorrection once someone has learned that higher-priced homes require more down payment.
