Use this approvU’s easy-to-use mortgage down payment calculator to determine how much down payment you need to buy your dream home with your current income, credit and usage.
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Use this mortgage down payment calculator to estimate how much down payment you need to buy your new home at your current income type and credit score.
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A down payment is a portion of the purchase price you put down to buy a home.
The amount you put down will affect your ability to afford the house, your mortgage loan amount, and your loan type.
For example, if you are buying a house on the market for $450,000, you will need to provide a $22,500 minimum as the down payment toward the home purchase.
The $427,500 ($450,000 minus $22,500) can be borrowed as a mortgage.
The cost of purchasing a home has continued to rise due to increased living costs, higher wages, and inflation. Unfortunately, for many people, these factors have increased the size of their down payment.
In Canada, you must put down a minimum of 5% of the home price as a down payment.
The ultimate down payment amount you will need depends on the house price, property type, credit score, and income type.
The minimum required down payment to buy an occupied or vacation property in Canada is 5% of the purchase price. Also, you must pay a default insurance premium if your down payment is less than 20% of the purchase price.
Purchase Price | Minimum Down Down Payment Required | Example |
Less than $500,000 | 5% of the purchase price. | House is $450,000 The minimum amount of down payment will be 5% of $450,000 = $22,500 |
$500,000 to $999,999 | 5% of the first $500,000 of the purchase price 10% for the portion of the purchase price above $500,000 | House Price is $750,000 The minimum amount of down payment will be [5% of $500,000] + [10% of ($750,000 – $500,000)] = $25,000 + $25,000 = $50,000 |
$1 million or more | 20% of the purchase price. | House is $1,20,000 The minimum amount of down payment will be 20% of $1,200,000 = $240,000 |
How you intend to use the property is another variable to determine your minimum down payment amount and, ultimately, your mortgage affordability.
If you intend to rent the new house, you will need to put down at least 20% of the purchase price, regardless of which lender you choose to go with, your income type, and your credit score range.
But if you intend to use the property as your principal residence, your minimum down payment will depend on your credit score range as outlined above.
Your credit score will determine the type of mortgage you can qualify for, the approximate interest rate you will get, the minimum required down payment and where you should go for that mortgage type.
600 And Above Credit Score Range: Low down payment of 5% for properties priced less than $500,000; 10% of the value of the house priced at more than $500,000 to $999,999; and 20% of the purchase price for homes priced at more than $1 million
Below 600 Credit Score: High down payment is required to buy a house with a credit score in this range. You need a minimum of 20% of the purchase price as a down payment to buy a home with a bad credit score.
How you generate the income affects how much down payment you will need to purchase your house.
Fully verifiable incomes: These are salary incomes, disability benefits, and pension benefits.
The minimum down payment breakdown for this type of income;
Purchase Price | Minimum Down Down Payment Required | Example |
Less than $500,000 | 5% of the purchase price. | House is $450,000 The minimum amount of down payment will be 5% of $450,000 = $22,500 |
$500,000 to $999,999 | 5% of the first $500,000 of the purchase price 10% for the portion of the purchase price above $500,000 | House Price is $750,000 The minimum amount of down payment will be [5% of $500,000] + [10% of ($750,000 – $500,000)] = $25,000 + $25,000 = $50,000 |
$1 million or more | 20% of the purchase price. | House is $1,20,000 The minimum amount of down payment will be 20% of $1,200,000 = $240,000 |
Non-Verifiable Income: These incomes cannot be validated with an employment letter, pay stub, Notice of assessment, and T4/T4A/T4E/T5. This income set falls under the non-verifiable income category. Within this income, you will need a minimum of 20% to buy a house.
Purchase Price | Minimum Down Down Payment Required | Example |
$1 to infinity | 20% of the purchase price. | House is $1,20,000 The minimum amount of down payment will be 20% of $1,200,000 = $240,000 |
Self-employed persons have difficulties confirming their income via accountant-audited financial statements, T1-General, and Notice of Assessment. This makes them ineligible for default insurance protection.
By law in Canada, all mortgages not covered by default insurance protection cannot exceed 80% of the house price.
Therefore, you will need to come up with 20% of the purchase price for the down payment.
Minimum Down Payment For Self-Employed Mortgages In Canada
Purchase Price | Minimum Down Down Payment Required | Example |
$1 to infinity | 20% of the purchase price. | House is $1,20,000 The minimum amount of down payment will be 20% of $1,200,000 = $240,000 |
In mortgages, bad credit scores are those in the below 600 range. Credit scores in this range are not eligible for default insurance protection. The mortgage loan amount cannot exceed 80% of the house price for a self-employed borrower.
Therefore, you need to come up with the other 20% share of the house price. That is your required down payment portion.
Minimum Down Payment For Bad Credit Mortgages In Canada
Purchase Price | Minimum Down Down Payment Required | Example |
$1 to infinity | 20% of the purchase price. | House is $1,20,000 The minimum amount of down payment will be 20% of $1,200,000 = $240,000 |
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You can use many income sources to save money for your down payment. Here is the list of acceptable income sources you can use to generate your mortgage down payment money.
You can use money from the below sources for your down payment:
The First-Time Home Buyer Incentive Program is an initiative by the federal government to help Canadian residents buy their first homes.
It is a shared equity program. Under this program, the government will provide you with 5% (for an existing house) or 10% (for a newly built house) of the house value to purchase your first home.
For this, the government also will share the house’s equity benefits if you sell your home before the end of the 25-year amortization period.
Federal, provincial, county and municipal governments offer assistance programs to assist first-time homebuyers with down payment funds. You will need to apply to these programs to get considered. Most of these grants require buying a house and living in a specific county or municipality.
An example of this program is the Oxford County Home Ownership Program.
The First-Time Home Buyers Plan (FTHBP) allows eligible Canadians to withdraw money from their Registered Retirement Savings Plans (RRSP) tax-free to help purchase their first homes.
The withdrawn money has to be paid back to your RRSP account within 15 years.
The Home Buyer Plan is a program instituted by the federal government for eligible Canadians to borrow up to $35,000 of their RRSP savings ($70,000 for a couple) to finance the down payment on their first home.
This tool will help you learn what house price you can afford and how much your mortgage and mortgage payments will be when you buy a home.
The approvU online mortgage refinance calculator will help you figure out just how much you would save per month and in total with a different loan term.
The approvU mortgage payment calculator will help you determine your regular mortgage payment amount.
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