Mortgage down payment calculator – MoneySense

If you plan to purchase a property, you’re likely aware that you’ll need a down payment. This is the portion of the purchase price you pay upfront and that is deducted from the amount you owe on the property. 

But how much will you need to save to cover the down payment on a property? While there are minimum down payment rules set out by the government of Canada, it ultimately comes down to the cost of the home you plan to purchase. 

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What’s a mortgage down payment? 

Many people don’t have enough money on hand to cover the full cost of buying a home. When this happens, the buyers are still expected to pay a set amount upfront. This is known as the down payment. The amount you’ll need for the down payment depends on the purchase price and the minimum down payment rules set out by the government of Canada. 

The down payment represents only a fraction of the cost of home ownership. If you’re unable to cover the entire cost of the property, you’ll have to apply for a mortgage, a kind of specialized loan, to cover the remaining balance, which you will pay back with interest over time. 

Because the size of your mortgage is calculated by subtracting the down payment amount from the total purchase price, the bigger your down payment, the smaller your loan, which will save you tens of thousands of dollars in interest charges over the course of the mortgage. 

If your down payment is less than 20% of the home’s value, you’ll also be required to get mortgage loan insurance, with premiums that typically range from 0.6% to 4.5% of your mortgage amount. 

Using a mortgage down payment calculator is a good way to better understand how the size of your down payment will affect your mortgage payments down the road. 

How to calculate your mortgage down payment

In Canada, the minimum amount you’ll need to provide as a down payment depends on the purchase price of the home. 

  • If the purchase price of the home is less than $500,000, your minimum down payment is 5% of the purchase price.
  • If the purchase price ranges anywhere between $500,000 and $1 million, the minimum down payment is 5% of the first $500,000, and 10% of the portion above $500,000.
  • If the purchase price is $1 million or more, you must have a minimum down payment of at least 20%.

For example, if the purchase price of the home you’re interested in is $450,000, you could put down as little as 5% as your down payment, which would be equal to $22,500.


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