In Ontario, the minimum down payment is based on the home's purchase price, not a flat percentage across the board.

For homes priced at $500,000 or less, the minimum down payment is 5% of the full purchase price. If you are buying a $500,000 home, that means a minimum of $25,000.

For homes priced between $500,000 and $1,499,999, the rule is split. You need 5% on the first $500,000 and 10% on the portion above $500,000. So if you are buying a home for $800,000, the minimum down payment would be $25,000 on the first $500,000, plus $30,000 on the remaining $300,000. That brings the total minimum down payment to $55,000.

For homes priced at $1.5 million or more, the minimum down payment is 20% of the full purchase price. At that level, mortgage insurance is generally not available, so buyers need a much larger amount saved.

This tiered structure is one reason buyers often adjust their price range after speaking with a lender. A home that seems only slightly more expensive can require a noticeably bigger upfront cash commitment.

Why 20% is not always required

One of the most common misconceptions is that you must have 20% down to buy a home. In many cases, that is simply not true. Buyers can purchase with less than 20% down if they meet the lender and mortgage insurance requirements.

When your down payment is under 20%, the mortgage is considered high-ratio. That means you will usually need mortgage default insurance. This insurance protects the lender, not the buyer, and the premium is added to your mortgage amount in most cases.

This is why a lower down payment can help you buy sooner, but it also raises your monthly carrying cost. You are financing more of the purchase, and you are adding an insurance premium on top of that. For some buyers, that trade-off is worth it. For others, waiting a bit longer to save more can create more breathing room month to month.

Putting more money down does a few helpful things at once. It reduces the amount you need to borrow, lowers your monthly mortgage payment, and can improve your overall borrowing position.

If you reach 20% down, you can avoid mortgage insurance altogether. That can translate into meaningful savings over time. It may also give you more flexibility with your financing options, depending on your lender and income profile.

That said, putting every available dollar into the down payment is not always the smartest move. Buying a home comes with other expenses, and it is wise to keep some cash in reserve. A solid emergency fund can matter just as much as reaching a certain percentage on paper.

The down payment is not your only upfront cost

This is where many first-time buyers feel surprised. Saving the down payment is a major milestone, but it is not the only cost you need to prepare for.

You should also budget for closing costs, which can include legal fees, title insurance, adjustments, home inspection costs, and land transfer tax. In Toronto, buyers may also face an additional municipal land transfer tax on top of the provincial one. Depending on the purchase price and location, these costs can add up quickly.

As a general planning rule, many buyers should set aside about 1.5% to 4% of the purchase price for closing costs, though the exact number depends on the property and the deal structure. If all of your savings go toward the minimum down payment, closing day can become much more stressful than it needs to be.

First-time buyers often qualify for programs or tax benefits that help with upfront costs, but those programs do not replace the minimum down payment requirement. You still need to meet the lender's baseline rules.

What first-time buyers can do is use available tools to reduce pressure elsewhere. For example, some may use funds from a registered account if they qualify under current rules, and some may benefit from first-time buyer land transfer tax rebates. These options can make the total cash needed more manageable, even though the down payment itself still follows the standard price-based structure.

This is one reason early planning matters. If you know what programs you may qualify for, you can decide whether your savings should go entirely toward the down payment or whether part of your strategy should focus on covering closing costs and moving expenses.

What lenders look at besides the down payment

A down payment opens the door, but it is not the only factor that determines what you can buy. Lenders also review your income, debts, credit history, employment stability, and overall debt service ratios.

That means two buyers with the same down payment can end up with very different approvals. One may comfortably qualify for the home they want, while the other may need to lower their price range or pay off debt first.

This is especially relevant in competitive Ontario markets, where buyers sometimes focus heavily on getting the minimum down payment together without checking whether the monthly payments will actually fit their lifestyle. Approval is one thing. Comfort is another. A smart purchase is not just about what the bank says yes to, but what feels sustainable after the move.

Should you buy sooner with less down or wait and save more?

There is no universal answer here. It depends on your timeline, income stability, comfort with monthly payments, and the type of market you are buying into.

Buying sooner with a smaller down payment may help you enter the market before prices rise further. That can be a reasonable strategy if your income is stable, your budget is realistic, and you still have money left for closing costs and unexpected expenses.

Waiting to save more can reduce your monthly obligations and strengthen your overall financial position. That may be the better path if you are stretching to reach the minimum, carrying other debt, or are concerned about maintaining flexibility after closing.

A lot of buyers benefit from running both scenarios side by side. Compare the monthly payment, the insurance cost, the cash you would have left after closing, and how each option fits your life over the next few years. That kind of planning usually leads to better decisions than chasing the absolute maximum purchase price.

Let’s say you are looking at a $700,000 home. The minimum down payment would be $25,000 for the first $500,000 and $20,000 for the remaining $200,000, for a total of $45,000.

If you have exactly $45,000 saved, you may still not be ready to buy. You would also need money for legal fees, inspection, land transfer tax, and other closing costs. On top of that, your monthly payment would reflect a high-ratio insured mortgage.

If you instead have $70,000 or $80,000 saved, you have more room to structure the purchase sensibly. You may still choose the minimum down payment, but now you are making that choice from a stronger position rather than out of necessity.

A smart first step

Before focusing on listings, get clear on your numbers. A lender or mortgage professional can help you understand what you qualify for, but just as important, a local real estate advisor can help you connect those numbers to actual market options.

That is where the conversation becomes more useful. It is not just about whether you can buy. It is about what kind of purchase makes sense for your budget, your goals, and the neighbourhoods you are considering. At Fanis Makrigiannis Real Estate, that kind of clarity is a big part of helping buyers move forward with confidence.

A home purchase should feel informed, not rushed. When you understand your true down payment requirement and the costs around it, you put yourself in a much better position to buy well, negotiate calmly, and move in without financial strain hanging over the experience.