Minimum Down Payment Calculator

What the Minimum Down Payment Calculator does

Canada does not use a flat down payment percentage. It uses tiers that change rate as the price crosses two thresholds, and almost nobody works out the real number until they see the arithmetic laid out. This computes the exact minimum for any price and shows the tier-by-tier build, so the figure is checkable rather than asserted.

It then answers the two questions that always follow. How far off am I, and what would 20% actually save? The second one is usually answered badly: the premium is quoted, and the interest on carrying it for twenty-five years is left out — even though the premium is added to the mortgage and repaid with interest like everything else.

• The exact minimum, with each tier shown and summed
• Your shortfall in dollars, and your loan-to-value at what you have
• The highest price your funds actually support, including the plateau at the insured cap
• What reaching 20% saves — the premium and the interest of carrying it
• Whether a 30-year insured amortization is open to you

The tiers, and the cliff at the end of them

For an owner-occupied purchase the minimum is built in slices: 5% on the first $500,000, and 10% on the portion between $500,000 and $1,500,000. On an $850,000 home that is $25,000 plus $35,000 — $60,000, or about 7.1%. Not 5%, not 10%.

Above $1,500,000 the structure does not continue. Default insurance is simply unavailable, so the minimum becomes a flat 20% of the whole price. That is a cliff, not a taper: at the cap the minimum is $125,000, and one dollar above it the minimum is $300,000. An extra dollar of price costs $175,000 of down payment.

If you are shopping anywhere near that line, knowing exactly where it sits is worth more than any rate you are likely to negotiate. This page warns when your price is close enough for it to matter.

• Up to $500,000: 5% of the price
• $500,000 to $1,500,000: $25,000 plus 10% of the amount above $500,000
• Above $1,500,000: a flat 20%, because insurance is unavailable
• Rental or investment: a flat 20% at any price, with no tiers
• The jump at the cap is $175,000 for one extra dollar of price

What 20% is really worth

Below 20% down, default insurance applies and the premium is added to your mortgage. On an $850,000 purchase with $60,000 down that premium is about $31,600.

But that is not what it costs you. Because it is financed rather than paid in cash, you repay it with interest across the whole amortization — roughly another $20,800 at 4.49% over twenty-five years. The real figure to weigh against saving more is closer to $52,400.

That does not automatically mean waiting is right. Prices move, rent is not free, and a year of saving has its own cost. But the decision should be made against the right number, and the premium alone is not it. There is also the provincial tax on the premium in Ontario, Quebec and Saskatchewan — that part is cash at closing and never financed.

• The premium is added to the mortgage, not paid at closing
• So you repay it with interest for the full amortization
• The true saving from reaching 20% is the premium plus that interest
• Provincial tax on the premium is cash, and separate
• Weigh it against how long saving the difference would take

The ceiling your funds actually reach

Inverting the tiers gives the highest price a given down payment supports, and it has a feature that catches naive calculations out.

Below $125,000 the inverse is straightforward. Above it, dividing by 20% seems right — that is the rule above the cap — but between $125,000 and $300,000 that division returns a number below the cap itself, which is wrong. You can always still buy at the cap, where the tiered minimum of $125,000 already applies. So $150,000 of down payment supports a $1,500,000 purchase, not the $750,000 a bare division suggests.

The result is a plateau: from $125,000 to $300,000 of down payment, the ceiling holds steady at $1,500,000, and only starts rising again once you have a genuine 20% of something larger.

• Up to $25,000: price = down ÷ 5%
• $25,000 to $125,000: price = $500,000 + (down − $25,000) ÷ 10%
• $125,000 to $300,000: the ceiling holds at $1,500,000
• Above $300,000: price = down ÷ 20%
• The plateau is where a naive inverse under-reports, sometimes by half

Using your results well

If you are short, try a slightly lower price before assuming you need the whole gap. Near a tier boundary the minimum falls faster than the price does, because the higher rate only applies above the threshold — so a modest reduction can close more of the gap than it costs you in house.

Start documenting the source of your funds now. Lenders want bank statements for savings, a signed letter for a gift confirming it is not a loan, and a full explanation for anything borrowed. That paperwork delays more closings than the amount ever does, and it cannot be rushed once you have an accepted offer.

And remember the minimum is a floor, not an approval. Clearing it is necessary; income, credit history and the documented provenance of every dollar decide the rest.

• Model a slightly lower price near $500,000 or $1,500,000 to see the tier effect
• Get a gift letter drafted early — it holds up closings more often than the money does
• Compare the true 20% saving against how long saving the difference takes
• Confirm 30-year eligibility with a lender rather than assuming it
• Budget the provincial tax on the premium separately, in cash