How Much Do I Really Need for a Down Payment in Canada?

Short answer: In Canada the minimum down payment is 5% on the first $500,000 and 10% on the portion from $500,000 to $1,500,000. Homes priced at $1,500,000 or more need 20%. With less than 20% down you pay mortgage default insurance, which is added to the mortgage.

If you’re a first time buyer in Alberta, the down payment question comes up fast: Do I really need 20%? Is 5% enough? What’s realistic for my price range? Here’s how it works, with Calgary examples.

Minimum Down Payment Rules in Canada

Rental properties, bruised credit and some self employed programs often need more, even under $1,500,000.

Big myth: You must have 20% down. Many first time buyers in Alberta buy with 5% to 10% down and still get a mortgage that fits their budget.

Alberta Examples: What 5%, 10% and 20% Look Like

Example 1: $400,000 starter home or condo

• 5% down = $20,000
• 10% down = $40,000
• 20% down = $80,000

Example 2: $550,000 townhouse

• 5% of the first $500,000 = $25,000
• 10% of the remaining $50,000 = $5,000
• Minimum down payment = $30,000

For comparison, 10% down is $55,000 and 20% down is $110,000.

Example 3: $700,000 detached home

• 5% of the first $500,000 = $25,000
• 10% of the remaining $200,000 = $20,000
• Minimum down payment = $45,000

For many buyers, reaching the minimum plus an emergency cushion is more realistic than saving all the way to 20%.

Why Do People Talk About 20% Down So Much?

1. No default insurance premium. Under 20% down you pay mortgage insurance, which protects the lender. At 20% or more there’s no premium.
2. Smaller mortgage. A bigger down payment means a smaller loan and lower payments.
3. Old advice. Many people grew up hearing “you need 20%”, which isn’t true for most first time buyers today.

In Calgary, waiting years to reach 20% can mean missing out on equity growth. The right number balances getting into the market sooner with keeping payments and risk manageable.

What Changes With a Bigger Down Payment?

1. Monthly payment: bigger down payment, smaller mortgage, lower payment.
2. Cash up front: more cash today. Don’t forget closing costs, moving and an emergency fund.
3. Risk tolerance: if you’re risk averse, aim closer to 20%. If getting out of renting is the priority, the minimum may be enough.

We show how each option plays out over three to five years, not just on possession day.

What Counts as an Acceptable Down Payment?

• Personal savings (chequing, savings, TFSA)
• First Home Savings Account (FHSA)
• RRSP through the Home Buyers’ Plan (up to $60,000 each)
• A gift from immediate family, with a signed gift letter
• Proceeds from selling another property

Borrowed down payments, such as from a line of credit, usually aren’t accepted for insured mortgages.

→ Related: Closing Costs for First Time Buyers in Alberta

Your Next Step

Not sure where you stand? In a quick call we can review your situation, run the numbers and show you what you need. Book a call or read the First Time Home Buyer Guide.

Frequently asked questions

What is the minimum down payment in Canada?

5% on the first $500,000 of the purchase price and 10% on the portion from $500,000 to $1,500,000. Homes at $1,500,000 or more need 20% down.

What is the minimum down payment on a $700,000 home in Calgary?

$45,000: 5% of the first $500,000 ($25,000) plus 10% of the remaining $200,000 ($20,000).

Can I borrow my down payment?

Usually not for an insured mortgage. The down payment should come from your own savings, FHSA, RRSP through the Home Buyers' Plan, a documented gift from immediate family or the sale of another property.

This article is general information, not personal financial advice. Rates, rules and programs change. Talk to a licensed mortgage broker about your situation. Lacroix Mortgage Group is licensed and powered by Mortgage Connection Inc.