The minimum down payment in Canada is based on purchase price, and many Ottawa homes can be purchased with less than 20% down. The trade-off is that a smaller down payment normally means mortgage default insurance and a…
The minimum down payment in Canada is based on purchase price, and many Ottawa homes can be purchased with less than 20% down. The trade-off is that a smaller down payment normally means mortgage default insurance and a larger monthly mortgage.
The minimum down-payment rules
For homes priced at $500,000 or less, the federal minimum down payment is 5%. For homes above $500,000 and below $1.5 million, the minimum is 5% of the first $500,000 plus 10% of the portion above $500,000. Homes at $1.5 million or more generally require at least 20% down.
What 5% down really means
On a qualifying home priced at $500,000 or less, 5% down is the federal minimum. Above that price, the calculation changes. Your lender also has to approve the mortgage, so meeting the minimum down payment does not automatically mean you qualify for the purchase.
Why buyers choose less than 20%
Some buyers prefer entering the market sooner rather than waiting years to save 20%. Others want to preserve emergency savings. The right choice depends on income stability, monthly affordability and how much cash you want left after closing.
Mortgage insurance changes the math
With less than 20% down, mortgage loan insurance is generally required for eligible purchases under $1.5 million. The premium is typically added to the mortgage, although applicable provincial sales tax is paid separately.
Compare the full scenario
Run the numbers at several down-payment levels. Look at payment, insurance premium, cash remaining after closing and the kind of property each option lets you buy.
A practical next step
A local Ottawa real estate agent can help you turn your budget into a realistic search plan, explain neighbourhood trade-offs and coordinate the buying process with your lender and lawyer.