How Much Do You Need for a Down Payment? Examples at $300K, $500K and $600K
Most people know they need "some" down payment. Fewer know exactly how much, and almost nobody remembers the closing costs until the last minute.
So let's make it concrete. Here's what the minimum down payment looks like at three price points that are common in Edmonton, plus the extra costs worth planning for.
These are illustrations based on current federal rules. Your lender, property type, and credit can affect what's required.
The minimum down payment rules in Canada
For a home under $1.5 million:
- 5% of the first $500,000
- 10% of the portion between $500,000 and $1.5 million
If you put down less than 20%, your mortgage needs to be insured (through CMHC, Sagen, or Canada Guaranty). The insurance premium is usually added to your mortgage rather than paid in cash.
The examples
$300,000 home
- Minimum down payment: $15,000 (5%)
- Mortgage before insurance: $285,000
- Insurance premium at 5% down (4.00%): about $11,400, added to the mortgage
- Total mortgage: about $296,400
$500,000 home
- Minimum down payment: $25,000 (5%)
- Mortgage before insurance: $475,000
- Insurance premium (4.00%): about $19,000, added to the mortgage
- Total mortgage: about $494,000
$600,000 home
- 5% of the first $500,000: $25,000
- 10% of the remaining $100,000: $10,000
- Minimum down payment: $35,000
- Mortgage before insurance: $565,000
- Insurance premium: 5.83% down falls in the 90.01–95% loan-to-value tier, so the premium is 4.00%, about $22,600, added to the mortgage
- Total mortgage: about $587,600
Why a little more down can go a long way
The insurance premium drops as your down payment grows:
- 5% to 9.99% down: 4.00%
- 10% to 14.99% down: 3.10%
- 15% to 19.99% down: 2.80%
- 20% or more: no mortgage insurance required
On a $500,000 home, going from 5% down to 10% down lowers the premium from about $19,000 to about $13,950. That's roughly $5,000 less borrowed, before you count the interest you'd save on it.
That doesn't mean you should always wait to save more. Prices and life both move. But it's worth knowing where the thresholds are.
Don't forget closing costs
Alberta has no land transfer tax, which is good news. You'll still have costs on closing day, and lenders want to see that you can cover them. They typically expect you to have about 1.5% of the purchase price available on top of your down payment.
On a $500,000 home, that's about $7,500 for things like:
- Legal fees and disbursements
- Land title registration fees
- Title insurance
- Home inspection
- Property tax and utility adjustments
Where your down payment can come from
Lenders are flexible about sources, as long as they're documented:
- Savings (usually with a 90-day history)
- An FHSA (First Home Savings Account)
- The RRSP Home Buyers' Plan (a loan from your retirement savings that you repay over time)
- A gift from an immediate family member, with a signed gift letter
- Proceeds from selling another property
Good records save a lot of back-and-forth. If money is moving between accounts, keep the statements.
The takeaway
For most Edmonton buyers, the minimum down payment is more attainable than people expect. A $300,000 home starts at $15,000 down. The bigger question is usually what's comfortable once you add closing costs, a moving budget, and a cushion for the first few months of owning.
Your next step
If you're saving toward a purchase and want to know where you stand, including how to use an FHSA or RRSP most effectively, I'm happy to map it out with you. There's no rush. Knowing the plan early usually makes the whole process calmer.