As of February 14, 2016, new federal rules require bigger down payments on some home purchases.1 If you’re a first-time buyer buying property less than $500,000, nothing changes.
- For properties valued at less than $500,000 you can use 5% down.
- 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 $500,000.2
- And for property values over $1 million still require a 20 percent down payment.
Calculate Your Required Downpayment Under The New Canadian Rules
Here’s How it Works
Up to $500,000 – 5% of house price
$500,001 to $999,999 – 5% of first $500k + 10% portion of house price above $500k
$1,000,000+ – 20% of house price
What Does This Look Like in Practice?
Read on to see required downpayment calculations in action – based on your purchase price tier.
Homes Below $500,000
Calculating the downpayment for these homes hasn’t changed. You still need a minimum downpayment of 5% of the purchase price. Regardless of home price, a downpayment of less than 20% means you’ll require mortagage default insurance.3
Home Price $400,000
Homes Between $500,001 and $1 million
These are the homes affected by the change – a common price range for “starter” homes in the Vancouver and Toronto housing markets.4
Home Price: $750,000
On a $750,000 home, you’ll need $50,000 for your downpayment. 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 downpayment required on a $750,000 home is $12,500 ($50,000 new required downpayment – $37,500 previous required downpayment)
Homes Over $1 million
If you’re buying a home over $1 million in Canada, you’ll still need at least $20% down.4
Home Price: $1,000,000
Average Home Prices
Average Detached Home Price as of April, 2016: $1,817,0275
Average Detached Home Price as of April, 2016: $1,257,9585
Table of Downpayments by Purchase Price
Under the Canadian minimum downpayment rules, this is how much you must put down when buying a home.
• Under $500,000 (Purchase price): <$25,000 (5% of purchase price)
• $600,000: $35,000
• $700,000: $45,000
• $800,000: $55,000
• $900,000: $65,000
• $999,000: $75,000
• $1,000,000: $200,000+ (20% of purchase price)
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.