Do You Need 20% Down to Buy in Ontario? (No, Here's the Math)

Source: CMHC premium rates, 2026. In Ontario, 8% PST on the premium is payable in cash at closing.

Take that $600,000 home with 5% down. The mortgage is $570,000, and the premium at 4.00% is about $22,800, added to the loan. The only part you pay in cash is the Ontario PST on the premium, roughly $1,824. So the real out-of-pocket cost of putting 5% down instead of 20% is the PST plus a slightly higher monthly payment, not a wall of cash.

The real cost of waiting to save 20%

The question is never just "insurance or no insurance." It is "buy now with insurance, or wait years to avoid it." And waiting has its own price tag that nobody puts on the invoice:

• Rent you keep paying. Two extra years of $2,500 rent is $60,000 gone, building someone else's equity.
• Prices that may keep rising. If your target home appreciates while you save, the 20% you are chasing becomes a moving target on a bigger number.
• Lost equity and mortgage paydown. Every month you own, part of your payment builds your equity instead of your landlord's.

For many buyers, the insurance premium is smaller than the cost of one more year of waiting. That is the math the "come back with 20%" advice ignores.

When does 20% down actually make sense?

To be fair, 20% is genuinely better in specific situations. Put 20% down if:

• You already have the cash without draining your emergency fund or delaying the purchase for years.
• You want to avoid the insurance premium and the small monthly cost of financing it.
• You want lower monthly payments and more breathing room in your budget.
• You are buying at $1.5M or more, where 20% is the legal minimum anyway.

The rule is simple: if you have 20% comfortably, use it. If reaching 20% means years of waiting, do not let it stop you from buying with 5%.

How the Down Payment Boost helps either way

Whether you put down 5% or more, the cash you need on closing day is what actually gates the purchase. Zown's Down Payment Boost gives eligible Ontario buyers up to 0.75% of the price back, rising to up to 1.25% (max $25,000) when financed through Zown's mortgage partner, Pine, paid at closing with a Zown partner lawyer (2 to 8 weeks otherwise). It offsets your closing costs and lowers the total cash you need to have saved, which is exactly the number that keeps first-time buyers on the sidelines.

See how much you could get back →

Frequently asked questions

Can I buy a house in Ontario with only 5% down?

Yes. The minimum down payment is 5% on the first $500,000 of the purchase price. On a $500,000 home that is $25,000. You will pay mortgage default insurance, which is added to your mortgage rather than paid in cash.

How much is CMHC insurance on a 5% down payment?

The premium is 4.00% of your mortgage amount when you put down 5% to 9.99%. On a $500,000 home with 5% down, the mortgage is $475,000 and the premium is about $19,000, added to the loan. Only the 8% Ontario PST on the premium is paid in cash at closing.

Is it better to put 20% down or buy sooner?

It depends on whether reaching 20% means waiting years. If you have the cash now, 20% avoids insurance and lowers payments. If saving 20% means several more years of rising rent and prices, buying sooner with 5% often comes out ahead.

Does putting less than 20% down hurt my mortgage approval?

No. Insured mortgages with less than 20% down are standard and widely available. In some cases insured mortgages even get slightly better rates because the lender's risk is covered. You still have to pass the stress test either way.

What is the minimum down payment on a home over $1 million?

On homes from $500,000 to $1,500,000, the minimum is 5% of the first $500,000 plus 10% of the amount above $500,000. On a $1,000,000 home that is $75,000. At $1,500,000 or more, the minimum is 20%.

Last updated July 27, 2026. General information, not financial advice. Insurance premiums and rules can change; confirm current figures with your lender.