What is a down payment?

A down payment is the amount of money you will pay upfront when purchaing a home.  A down payment is typically expressed as a percentage amount of the purchase price - 5% down payment, 20% down payment.


What is the minimum down payment I will need?

The minimum down payment depends on the purchase price of the home.

  • If the purhcase price is less than $500,000, the minimum down payment is 5%
  • If the purchase price is between $500,000 and $999,999, the minimum down payment is 5% of the first $500,000 and 10% of any amount above $500,000.
  • If the purchase price is $1,000,000 or more, the minimum down payment is 20%


What are closing costs?

It is very important not to overlook closing costs as they need to be budgeted for on top of your down payment.  Closing costs include the money you will be required to have to close the purchase of your new home.


How much will I need to cover closing costs?

Closing costs range from 1.5% to 5%+ of the purchase price of the home.  Below is an overview of expected sources of closing costs.

  • Real Estate Lawyer - The lawyer ensures that your paperwork is filed, your rights are protected and that your transaction goes through


  • Statement of adjustments -  The Statement of Adjustments is a document that sets out the purchase price, credits the deposit, and prorates any prepaid items such as property taxes


  • GST/HST - If you buy or build a brand new home or condo, you need to pay the federal goods and services tax (GST) on the purchase price – or the harmonized sales tax (HST), if you live in a province that has it.


  • Land Transfer Tax - When you acquire property or land, you will pay a land transfer tax to the province when the transaction closes.  As a first time home buyer, you will have a $4000 instant credit to be applied to the Land Transfer tax.


  • PST on Mortgage Insurance - If you don’t save enough to make a down payment of 20% or more on a home, you will need to purchase mortgage default insurance.  More commonly known as CMHC insurance, the costs of the insurance is added to your mortgage except for the PST, the PST is a closing cost.