5% down or 20%: insured, conventional, and what actually changes.

Below 20% down, a mortgage must carry default insurance from CMHC, Sagen, or Canada Guaranty — see how the three insurers compare. At 20% or more, the mortgage is conventional and doesn't require that insurance at all, provided the amortization stays within standard limits.

The minimum down payment in Canada is 5% on the first $500,000 of purchase price and 10% on any portion above that, up to the $1.5 million insured cap; above $1.5 million, a minimum 20% down payment is required regardless, because default insurance isn't available at that price point.

That blended calculation catches brokers new to the math more often than any other part of the down payment conversation. On a $700,000 purchase, for example, the minimum isn't a flat 5% of the full price — it's 5% of the first $500,000 ($25,000) plus 10% of the remaining $200,000 ($20,000), for a $45,000 minimum, not the $35,000 a flat 5% calculation would suggest. Running that blended number correctly at the first conversation avoids resetting a client's down payment expectations midway through the file, and it's the same first-conversation discipline that pays off in fulfillment support not having to unwind an incorrectly packaged file later.

The premium is a percentage of the loan amount, on a sliding scale by loan-to-value — 4.00% at 5% down, down to 2.40% at 20-24.99% down, before the requirement disappears entirely at 20%+ with a conventional mortgage. The premium is typically added to the mortgage balance rather than paid upfront, meaning the client is financing (and paying interest on) the premium itself for the life of the amortization.

That premium isn't a one-time inconvenience — because it's typically rolled into the mortgage and amortized alongside it, the client pays interest on the premium itself for as long as the mortgage runs, which meaningfully raises the true cost of a minimum-down purchase beyond the sticker premium figure. It's worth showing a client the amortized cost of the premium, not just the upfront percentage, when they're weighing whether to stretch for a larger down payment.

No — the OSFI qualifying rate, the greater of the contract rate plus 2% or the minimum qualifying rate, applies the same way whether a client puts down 5% or 50%. What a larger down payment does change is the size of the mortgage being qualified for in the first place, which lowers the payment used in the GDS/TDS calculation — that's the actual qualifying advantage, not a different stress-test rate.

It's worth walking a client through this distinction explicitly, because the intuition often runs the other way: a client assumes a bigger down payment means an easier stress test, when what it actually means is a smaller number being tested in the first place. For two otherwise identical buyers at the same purchase price, the one putting 20% down qualifies more comfortably not because their qualifying rate is lower, but because they're financing less of the purchase to begin with.

Standard insured amortization is capped at 25 years, but since December 2024, 30-year amortization has been available on insured, high-ratio purchases for first-time buyers and buyers of new-build homes. Conventional (20%+ down) mortgages have long allowed amortizations beyond 25 years at lender discretion, so this change narrowed — without eliminating — a gap that used to favour conventional financing on amortization length alone.

Eligibility for the 30-year insured option is worth confirming carefully before setting a client's expectations: at least one borrower on the file must genuinely qualify as a first-time buyer — never having owned before, or not having occupied a home they or a spouse owned in the prior four years — or the purchase must be a new build. A repeat buyer purchasing a resale home with 10% down doesn't qualify for the extended amortization just because the mortgage is insured.