For an eligible home purchase in Ontario, the minimum down payment is 5% up to $500,000, plus 10% of the portion above $500,000 if the price is below $1.5 million. At $1.5 million or more, plan for at least 20%.

Information checked November 11, 2026.

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Three purchase prices, three cash targets

At $450,000, the minimum is $22,500. At $750,000, the first $500,000 requires $25,000 and the remaining $250,000 requires another $25,000, for a total of $50,000. At $1.5 million, 20% is $300,000.

The break at $1.5 million matters when you are comparing detached homes in Markham or Richmond Hill. A slightly higher price can change the required cash by much more than the difference in price.

Account for insurance and closing

A down payment below 20% generally requires mortgage default insurance if the mortgage qualifies. The premium can typically be added to the mortgage balance. Ontario retail sales tax on the premium is a closing cost, so ask the lender and lawyer for the amount you need in cash.

A lender can require a larger down payment depending on the property, use, credit profile and mortgage program. Verify your eligibility before setting an offer limit.

Check the timing of your money

The deposit under the offer is often due much earlier than closing. For a $750,000 purchase with a $50,000 down payment and a $25,000 deposit that is credited toward the price, $25,000 of down payment remains at closing, plus closing costs. Ask how long it takes to withdraw savings from the accounts you intend to use.

How to plan the cash before the offer

Consider a buyer weighing homes at $485,000 and $710,000. If both qualify for minimum insured down payments, the first would require $24,250. The second would require $25,000 on the first $500,000 and $21,000 on the remaining $210,000, or $46,000 total. That difference of $21,750 matters before adding insurance tax, land transfer tax, legal fees and the money the buyer wants to keep after closing. The right comparison uses the actual minimum and a second, more comfortable down-payment scenario.

Suppose the same buyer can access $65,000 today and expects another $12,000 from savings later. She separates what she can use for the deposit from the cash she will have by closing. If a source depends on a gift or registered account, she checks the lender’s documentation requirements and processing dates before using it in the plan. Then she compares the mortgage payment and liquid savings remaining under each alternative.

What to check before deciding

Apply the rule to the actual price

The minimum is a calculation based on price and eligibility. Use the exact agreed price, not a rounded figure from the listing or a budget from a previous offer. Make the assumption explicit in your notes. Have the lender price the transaction just below and just above any important threshold in your range. Ask which programs could apply to each home.

A higher price changes more than the monthly payment. Near the insured mortgage price limit it can materially change cash required and available loan options. Compare the result against the amount or risk you can actually carry. Set a purchase ceiling based on the available cash under each scenario. Confirm it again if negotiations raise the price.

Match the funds to lender documentation

Build a record of where the down payment comes from: a savings account, sale proceeds, a gift, or eligible withdrawals from registered plans. Different sources can need different proof. Keep statements, the trail of recent transfers and any lender gift form. Ask about which deposits must be explained and which documents are time-sensitive.

A transfer into your account shows money arrived but may not establish its source. A payment promised by another person does not guarantee it is ready for the deposit. Request written guidance before moving large sums or drawing from an account. Plan for bank processing time and keep records in one folder.

Compare a larger down payment fairly

Ask for the difference in premium, rate, payment and closing cash under two down-payment amounts, using the same home and amortization. Test this part of the plan under less favourable conditions. Compare the total loan balance, including any premium added to it, with the remaining savings. For Ontario, check the cash tax on insurance separately.

A lower insured loan rate can come with an insurance premium. Using an extra $15,000 for the down payment may also reduce the buffer you need for repairs. Choose a response you can carry out before you reach the deadline. Choose the amount that leaves a practical reserve and ask the lender to confirm both payment and eligibility. See the insurance cost example.

Track the deposit and remaining cash separately

A deposit under a resale agreement usually becomes part of the amount credited at closing. Write down what is payable now and what remains payable later. Compare the contract deadline with the hours of your bank and the time your account needs to release funds. Discuss accepted payment methods with the holder.

If the deposit must be paid promptly, an investment withdrawal that takes a few days cannot be relied on. Do not assume a late payment is harmless. Keep accessible funds in the right place and check the offer deposit guide before signing the offer. Ask the lawyer what to do if timing changes.

Do a second test at closing

Take the remaining down payment, transfer tax, legal charges, insurance tax where applicable, moving costs and a reserve for immediate repairs. Compare the sum with real cash available. Get a comparable figure or document before changing the plan. Have the lawyer estimate the costs for the actual address. In Toronto the city tax can make a significant difference from an otherwise similar York Region purchase.

A lower-than-expected appraisal or later withdrawal can create a funding gap even when the minimum down payment was calculated correctly. Use the result to decide where you need more time. If the figures only work when everything arrives on time, review price or timing with the lender before you accept a firm obligation.

Follow-up questions

Is 20% always the right target?

The answer depends on the mortgage, price and cash you want to keep. Ask for the total cost of each loan option and compare the emergency reserve left after closing. A lower down payment where available can leave cash accessible, while a higher one may reduce borrowing costs. Compare both before deciding.

Can I use money that has not arrived yet?

Ask your lender what evidence is acceptable and when the funds must be available. For your own schedule, count only verified accessible funds for the offer deposit and leave a separate line for money expected at closing. Have a fallback if the date or amount changes.

A useful worksheet has three dates: the deposit deadline, the deadline your lawyer gives you to deliver funds, and the closing date. Put the confirmed source of each payment beside its date and leave an accessible reserve.