The standard purchase-price tiers
For a $400,000 home, 5% is $20,000. For a $600,000 home, the calculation is $25,000 on the first $500,000 plus $10,000 on the remaining $100,000, for a $35,000 minimum.
- Below $500,000: 5% of the purchase price
- $500,000 to below $1.5 million: 5% of the first $500,000 plus 10% of the remainder
- $1.5 million or more: generally 20%
What mortgage loan insurance does
A down payment below 20% usually creates a high-ratio mortgage that requires mortgage loan insurance. The insurance protects the lender if the borrower defaults; it is not home insurance and does not replace disability or life insurance. The premium can increase the mortgage balance.
- It protects the lender, not the buyer
- The premium depends partly on loan-to-value
- Provincial sales tax treatment can vary
Do not spend every saved dollar on the down payment
Keep a separate allowance for closing costs and an emergency buffer. A larger down payment can reduce the mortgage, but using all available cash can leave a buyer unable to cover legal fees, adjustments, moving costs or immediate repairs.
Worked examples at $800,000 and $1.5 million
For an $800,000 home, the standard minimum is 5% of the first $500,000 ($25,000) plus 10% of the remaining $300,000 ($30,000), for $55,000 in total. Because that is below 20% of the purchase price, mortgage loan insurance would typically be required if the mortgage otherwise qualifies.
For a $1.5 million home, the standard minimum is 20%, or $300,000. Keep legal fees, land transfer tax, inspection and other closing costs separate from both examples.
Insurance premium versus cash required at closing
A lender may add the mortgage-insurance premium to the mortgage, which increases the amount on which interest is paid. Provincial sales tax on the premium may have to be paid in cash and cannot necessarily be added to the mortgage. The ToolsFA affordability result does not calculate either amount.
Step-by-step
How to use the affordability calculator
- 1Enter the cash down payment that is actually available for the purchase.
- 2Keep closing costs and an emergency reserve outside that amount.
- 3Select Calculate estimate and compare the entered down payment with the minimum required for the estimated price.
- 4If the down payment is below 20%, ask the lender for the applicable mortgage-insurance premium and tax treatment before final budgeting.
Frequently asked questions
What is the minimum down payment on an $800,000 home?
Using the standard tiers, it is $25,000 on the first $500,000 plus $30,000 on the remaining $300,000, for $55,000.
Does mortgage loan insurance protect the buyer?
No. Mortgage default insurance protects the lender if the borrower defaults. It is different from home, life or disability insurance.
Does the ToolsFA estimate add the insurance premium?
No. The affordability calculator does not calculate or add the mortgage-insurance premium. Obtain the premium from the lender or insurer for a complete financing budget.
Try your own numbers
Canada House Affordability Calculator
Enter income, debts, down payment, interest rate and property costs, then select Calculate estimate to reveal the result and breakdown.
Related Canadian home-buying guides
Official sources
Sources reviewed October 6, 2026. Rules and lender policies can change.