Down payment
Down payment rules, sources and the paper trail.
Having the money is only half the test. Canadian lenders must also be satisfied about where it came from, that it has been yours long enough to prove, and that the resulting loan-to-value ratio is one they are allowed to fund.
Executive summary
Minimum down payment by purchase price
| Purchase price | Rule | Minimum required |
|---|---|---|
| $400,000 | 5% of the full price | $20,000 |
| $500,000 | 5% of the full price | $25,000 |
| $700,000 | 5% of first $500k + 10% of the next $200k | $45,000 |
| $1,000,000 | 5% of first $500k + 10% of the next $500k | $75,000 |
| $1,499,999 | 5% of first $500k + 10% of the remainder | $125,000 |
| $1,500,000 | 20% of the full price — insurance unavailable | $300,000 |
Note the cliff at $1,500,000: the minimum jumps from $125,000 to $300,000 across one dollar of price, because default insurance is not available at or above that threshold. Buyers near the line should price both sides of it before negotiating.
Insured, insurable, uninsured — and why it changes your rate
The counter-intuitive result is that a larger down payment does not always produce the lowest rate. It produces the lowest total cost more often than not, but the rate itself can be higher than an insured borrower's.
Acceptable sources and what each one requires
| Source | Accepted? | Evidence required |
|---|---|---|
| Savings and chequing | Yes | 90 days of statements showing accumulation |
| TFSA, non-registered investments | Yes | 90 days of statements plus the transfer trail on liquidation |
| FHSA | Yes | Account statements and withdrawal confirmation |
| RRSP via Home Buyers' Plan | Yes | Statements, withdrawal form and deposit trail; funds must be repaid over time under CRA rules |
| Gift from immediate family | Yes | Signed gift letter confirming no repayment, plus proof of deposit into your account |
| Sale of an existing property | Yes | Firm sale agreement and the statement of adjustments |
| Sale of a vehicle or other asset | Usually | Bill of sale plus the deposit trail |
| Borrowed funds (loan or line of credit) | Sometimes, uninsured only | The repayment is added to TDS, reducing capacity |
| Cryptocurrency | Lender-dependent | Exchange records and a full trail into a Canadian account; often required to be seasoned |
| Cash deposits with no source | No | Cannot be verified; will be excluded |
| Gift from a non-relative or employer | Rarely | Lender-specific; usually declined on insured files |
The 90-day paper trail, and why it exists
Mortgage lenders and brokers are reporting entities under Canada's anti-money-laundering regime, with obligations to identify clients and understand the source of funds. That is why a lender that already knows your balance still asks how it got there.
The practical standard is 90 days of complete statements — every page, showing your name, the account number and the running balance — for each account holding down payment funds. Any deposit that is large relative to your normal pattern needs its own explanation and its own document.
- Consolidate early. Move funds into one account more than 90 days before you apply so the trail is short and clean.
- Screenshots are not statements. Lenders need the official document, including the pages that look empty.
- Explain, then evidence. A tax refund, a bonus or a matured GIC is fine — each just needs a matching document.
Worked example: 15% versus 20% on a $780,000 purchase
Failure modes and recovery
| What goes wrong | Why it stalls the file | Recovery action |
|---|---|---|
| Large unexplained deposit inside 90 days | Source of funds cannot be evidenced | Produce the underlying document, or wait until it seasons past 90 days |
| Gift arrives with no letter | Lender cannot confirm it is non-repayable | Signed gift letter from the donor plus the deposit trail |
| Funds sitting overseas at closing | Transfer timing and source verification | Move funds to a Canadian account early, keeping the full transfer record |
| Down payment borrowed quietly | The repayment hits TDS and the deposit is traceable | Disclose it, re-run ratios, or use a different source |
| Every dollar spent on the down payment | No cushion for closing costs and adjustments | Budget land transfer tax, legal fees and adjustments separately |
| Buying just above $1,500,000 | Insurance unavailable, minimum jumps to 20% | Renegotiate below the threshold or restructure the down payment |
Written and reviewed by the Canadian Mortgage Compass Editorial Desk. This page is general information for Canadian readers and is not mortgage, legal, tax, or financial advice, and not an offer of credit. Rules, rates, and lender policies change; confirm your own situation with a licensed mortgage professional in your province. Editorial policy · Corrections