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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

Downpayment Required:
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

Calculate It
Home Price $400,000
Downpayment $20,000

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

Calculate It
Home Price: $750,000
Downpayment: $50,000

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

Calculate It
Home Price: $1,000,000
Downpayment: $200,000

Average Home Prices
Metro Vancouver
Average Detached Home Price as of April, 2016: $1,817,0275

Metro Toronto
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)

1. http://ww.cbc.ca/news/canada/toronto-new-mortgage-rules-1.3448550
2. http://www.fcac-acfc.gc.ca/Eng/resources/publications/morgages/Pages/BuyingYo-Acheterv-10.aspx
3. http://www.fcac-acfc.gc.ca/Eng/resources/Paegs/Glossary-Glossair.aspx#mortdef
4. https://www.thestar.com/business/real_estate/2016/02/15/five-things-to-know-about-canadas-new-mortgage-rules.html
5. http://business.finacnialpost.com/personal-finance/mortgages-real-estate/toronto-home-price-increases-now-closing-in-on-heady-vancouver-housing-market