How Much is a Deposit/Down Payment on a House?

Getting together a deposit for your home is the first and one of the most important steps in your home buying process. But how much do you need? Let’s break this down together to get you set up successfully and get you into your new home! 

Since it might take years to save up for a down payment, the purchasing procedure is often initiated far before the actual purchase is made. This is because the location of the home you want to buy, how much money you make, and the property’s price are all important considerations. So let’s get down to the important numbers. 

If the purchase price is less than $500,000, a down payment of 5% of the total purchase price is required. For homes that cost more than $500,000, the down payment requirement is 5% for the first $500,000 and 10% for the remaining purchase price, with the first $500,000 being the most restrictive.

Your Down Payment and Insurance

Keep in mind that these are the same minimum criteria for qualifying for a mortgage; anything below 20 per cent is considered a high-ratio mortgage and will require the purchase of mortgage default insurance to qualify. The mortgage default insurance protects the lender if the borrower fails to make the payments as promised. Your home loan insurance can be paid ahead or rolled into your monthly mortgage payments, whichever is more convenient.

Calculating Down Payment

When purchasing a property that costs less than $500,000, the down payment is as little as 5 percent. Homebuyers who purchase a house between $500,000 and $999,999 will make a down payment of five per cent of the $500,000 purchase price and ten per cent of the remaining balance. has one of the best down payment calculators in Canada. The mortgage payment calculator will show you how much money you will need to spend each month to cover your mortgage payments. To see which one works best for you, you may evaluate alternative down payment amounts, amortisation durations, and variable and fixed mortgage rates. It also computes your mortgage default insurance payments and land transfer tax obligations.

Using a high ratio mortgage might help you get into a home if you have the cash flow to handle a mortgage loan but do not have the money to make a down payment of at least 20%. A high-ratio mortgage will need the purchase of mortgage default insurance. Alternatively, the fee can be applied to your principal amount or paid in full in advance.

When you put down a more significant sum of money, you pay less interest on your loan. However, when you take up a high-ratio mortgage, you may pay more in interest since you are borrowing a more significant portion of the purchase price with a lower down payment.

Don’t Forget About the Deposit

The deposit and the down payment are often used interchangeably by some. However, put it in perspective: The deposit is a prepayment for your down payment. Typically, the fee is $10,000, although this might vary depending on how serious you are about the purchase and the property’s price. When submitting an offer to purchase, the buyer must include a down payment in the form of a certified check or bank draught. 

Learn More About Purchasing a Home

There is a great deal of information to learn in purchasing a house. Consult with your real estate team to ensure you’re fully informed about all of the criteria and choices accessible to you during the home buying process. With the help of your financial adviser, lawyer, and real estate agent, you do not have to go through this process alone.

First-time buyers and those who are house looking for the first time will find this information helpful. It contains current facts and computations that will assist you in making educated decisions and understanding the Canadian home-buying process. To learn more about the Homebuying Step by Step, Checkout Canada Home and Mortgage Corporation’s guide to buying a home in Canada, visit

dorts for bc realtors
vancouver real estate and covid impact in 2022