Saving for a down payment can feel like scaling a mountain—particularly in Ontario's competitive housing landscape. Yet, the down payment is a cornerstone of your homebuying journey, influencing everything from your monthly payment to whether you'll need mortgage default insurance.
Minimum Requirements (Explained)
- Under $500,000: Minimum 5% of the purchase price.
- Between $500,000 and $999,999: 5% on the first $500,000, then 10% on the remaining balance.
- $1 Million+: At least 20% down, as mortgage default insurance isn't available for properties over $1M.
Mortgage Default Insurance
This insurance is mandatory if your down payment is under 20%. While it adds to your monthly costs, it lets you purchase a home with a smaller initial investment. Recognizing that these premiums can be rolled into your mortgage is crucial to spreading the cost.
Building Your Down Payment
- High-Interest Savings Accounts: Earn better-than-average interest to help your savings grow faster.
- RRSP & The Home Buyers' Plan: First-time buyers in Canada can withdraw up to a specific limit from an RRSP to use toward their home purchase, tax-free if repaid within the designated timeline.
- Gifts & Family Assistance: Many Ontario families help children with down payment funds, which can expedite homeownership if adequately documented.
Why Size Matters
The down payment you choose sets the tone for your mortgage obligations. A larger down payment reduces monthly payments and might qualify you for lower interest rates. Conversely, tying up too much capital in your home can leave you short for emergencies or other investments.
Lighthouse Lending's Approach
We understand that every buyer's situation is different. Our team can help you determine an optimal down payment, factoring in your monthly budget, credit standing, and future plans. We also connect you to relevant government incentives if you qualify.
Do you still have questions about your down payment options? Apply now or contact Lighthouse Lending for personalized guidance. We'll help you strike the perfect balance between short-term affordability and long-term stability.
Lighthouse Lending Inc., licensed mortgage brokerage, FSRA #13301. This guide is for general information only and is current as of November 2026. Rates, limits, and figures shown are illustrative, vary by lender and by your situation, and are subject to change. This is not an offer of credit, financial advice, or a commitment to lend. Speak with a licensed mortgage professional about your own circumstances.
