Mortgage Down Payment Calculator

Saving for a down payment is a significant barrier that many buyers face to enter homeownership. It can be challenging to determine just how much you need to save. A down payment calculator in Canada can make it easier to figure out the minimum down payment required to purchase a home. With just a few inputs you can quickly estimate the amount you will require to put down on the purchase price of any home.

To help you determine how much you will need to save use our house down payment calculator. This handy tool will help you calculate the minimum amount required and the impact it has on your total mortgage amount, making it easier for you to plan ahead.

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Key Takeaways

• Using a down payment calculator can help calculate the total mortgage needed and help you budget for a down payment.
• Your down payment can impact whether you need to pay mortgage default insurance.
• Minimum down payment requirements vary based on the purchase price of the home.

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What is a Down Payment?

A down payment is the lump sum amount usually discussed as a percentage of the total purchase price that is paid upfront by the buyer when taking out a mortgage to purchase a home. Down payments are a requirement when purchasing a home though the amount will vary depending on the cost of the home and your financial situation. The amount you put down will affect the total mortgage amount required as well as impact your expected monthly mortgage payments. 

How Much Down Payment Do I Need?

The minimum amount you need for a down payment depends on the purchase price of the home. 

Purchase Price	Minimum Down Payment Required
$0 – $500,000	5%
$500,001 – $999,999.99	5% on the first $500,000 and 10% on the remaining amount
$1,000,000 +	20%

The size of your down payment will determine your loan-to-value (LTV) ratio. This ratio is the most important factor in mortgage rate pricing with either insured or insurable lending criteria. The LTV ratio will also determine whether you need to purchase mortgage default insurance. 

Why Choose a 5% Down Payment

A 5% down payment is the minimum amount needed to obtain a mortgage in Canada when the property is priced under $500,000. Choosing a 5% down payment can be a great option for first-time buyers looking to become homeowners. This lowest entry point will also give you access to the best rates. 

Why Choose a 10% Down Payment

A 10% down payment is a good choice if you’re looking to reduce your total mortgage amount while still having access to the best rates. 

Why Choose a 20% Down Payment

A 20% down payment is the minimum requirement if you’re purchasing a property priced at $1 million or more. Choosing this option will help you avoid mortgage default insurance premiums. As well, this option reduces the qualifying mortgage amount even further. You will also have the ability to extend your amortization up to 30 years; however, this higher amortization would carry a higher interest rate when compared to a 25-year amortization.

Why Choose a Down Payment Greater than 20%

Choosing to put down more than 20% can be a great option if you want a higher purchase amount and are making up the difference with a larger down payment. If you are purchasing a property under $1 million and put down at least 35% or more you will have access to better rates than putting down 20%, 25%, 30%, or anything in between 20% and 34.99%. With this last option, you could avoid paying mortgage default insurance premiums. You can also choose to extend your amortization to 30 years though you will pay a higher interest rate. 

How to Use a Down Payment Calculator

The mortgage down payment calculator tool allows you to input the details of the home you wish to purchase and calculate how much you will need for a down payment based on your purchase price. As well, the calculator will confirm whether mortgage default insurance is necessary based on your down payment. 

The calculator is easy to use and can help potential homebuyers calculate the total mortgage they will need and how much to budget for a down payment. To get started you’ll need to provide the purchase or asking price of the home, the province in which the home is located, and either the down payment percentage or exact amount. 

Purchase Price: Enter the purchase or asking price of the home.

Province: Select the province from the drop-down where the home is located. 

Down Payment: Enter either a percentage (5%, 10%, etc) or the exact amount to calculate the percentage.

Mortgage Insurance: The calculated mortgage default insurance premium you would need to pay based on your down payment amount. 

Total Mortgage Amount: The calculated total mortgage amount you will need in addition to mortgage default insurance premium (if applicable) less the down payment amount. 

Helpful Calculator Tips – 

Down payment: You can either run scenarios using a set percentage (ex. 5%, 10%, 15%) which will calculate the dollar amount or if you have an exact down payment figure in mind you can use this amount and it will automatically calculate the percentage for you.

Mortgage Insurance: Mortgage default insurance is a requirement when you are putting down less than 20% as a down payment. You can run scenarios with various down payment amounts to see how the default insurance payable changes based on the down payment amount. 

Provincial Sales Tax: If this box appears indicating that you are purchasing in a province that collects provincial sales taxes (PST / RST / QST) on the mortgage default insurance premium. This sales tax will be collected by your lawyer or notary. Although the province selected will not change the outcome of the default insurance premium, CMHC will confirm if provincial tax is due and how much you will be required to pay. Unlike your default insurance premium, the provincial sales tax cannot be rolled into your mortgage. 

How to Calculate Your Down Payment

It’s easy to calculate down payment requirements. To calculate the minimum down payment required on the purchase price of a home you can take the purchase price of the home and then multiply it by the percentage of the down payment that is required. Here are a few examples:

$500,000 purchase price with a 5% down payment

$500,000 x 0.05 = $25,000

$750,000 purchase price with a combination of 5% and 10% down payment

$500,000 x 0.05 = $25,000 (5% on the amount under $500,000)

$250,000 x 0.1 = $25,000 (10% on the amount over $500,000) 

$25,000 + $25,000 = $50,000 (total down payment)

$1,000,000 purchase price with a 20% down payment

$1,000,000 x 0.2 = $200,000

How to Use the Down Payment Calculator to Your Advantage

You can use the down payment calculator to run scenarios to see just how much you can save based on the amount you put down. By testing what you have as a down payment on a house and calculating using up to 3 different down payment amounts at a time you can see what impact this has on the mortgage default insurance premium you will pay, your total mortgage needed, and what provincial taxes you may need to pay on the mortgage default insurance premium. 

Use the calculator to see how much down payment for a house you need while making the most of maximizing savings so you can compare and save on your mortgage today. 

Types of Loans & Down Payment Requirements

Depending on the type of mortgage loan you are looking to obtain for your home purchase there may be some down payment restrictions to take into consideration. 

Mortgages 

There are two types of conventional mortgages that are available through A lenders referred to as high-ratio and low-ratio. 

For high-ratio mortgages, you can put down between 5% and 19.99% (property value dependent). High-ratio mortgages require mortgage default insurance since you would put down less than 20% of the home’s purchase price. 

For a mortgage to be considered low-ratio you would put down 20% or more of the home’s purchase price and the lender would pay a mortgage default insurance premium on your behalf to protect themselves from the risk of default. 

If you put down 35% or more downpayment, the lender-covered cost of insurance on your low-ratio mortgage is the lowest, so the lender would pass these savings to you by discounting your mortgage rate.

HELOC

A HELOC is a revolving credit facility that leverages against the equity in your home. To get a HELOC as a mortgage you need to have at least 35% equity in the home. If you are purchasing with only a HELOC (without a term loan mortgage) you would need at least a 35% down payment as the minimum loan-to-value (LTV) on these types of mortgage facilities is 65%.     

Subprime

Subprime lending, also called  B or private lending, offers mortgages that cater to clients that either have fluctuating or self-employment income, as well as those with less-than-perfect credit scores or those unable to qualify at A lenders. 

These types of lenders typically require a minimum 20% down payment (or more if you are self-employed). A higher down payment is needed as B and private lenders cannot provide loans guaranteed by the federal government (i.e. those with mortgage default insurance). 

Frequently Asked Questions