Downpayment Rules

If your down payment is less than twenty percent of the purchase price you are required by Canadian law to purchase mortgage insurance from Canadian Mortgage and Housing Corp. (“CMHC”) or a private insurer (Genworth Financial or Canada Guaranty).

For all insured mortgage loans, the maximum purchase price must be below $1,000,000. If the purchase price is above this amount, you are not eligible for mortgage insurance, and therefore, may not purchase the home with less than a 20% deposit.

You must have a minimum down payment of 5% of the purchase price (if less than $500,000) and 10% of the purchase price above $500,000.

Normally, the minimum down payment must come from your own resources. However, a gift of a down payment from an immediate relative is acceptable.

The insurance premium to be paid will depend on the amount you are borrowing and the percentage of your down payment. The insurance premium will range between 0.60% – 4.50% of the mortgage amount, and the premium can be added to the principal amount of the mortgage.