The statutory minimums
Effective December 15, 2024, Canada's minimum down payment tiers are:
| Purchase price | Minimum down payment |
|---|---|
| $0 – $500,000 | 5% of price |
| $500,001 – $1,500,000 | 5% on first $500K + 10% on the portion above |
| $1,500,001 and up | 20% of price |
A $750,000 Toronto condo: 5% of the first $500K ($25,000) + 10% of the next $250K ($25,000) = $50,000 minimum. A $1.2M condo: $25,000 + $70,000 = $95,000. A $1.6M condo: 20% × $1.6M = $320,000.
The $1.5M ceiling change moved a real slice of the Toronto market — two-bed units in the $1.0M–$1.5M band — from "you need $200K to $300K" to "you might need $75K to $125K". CMHC's site has the current rules; verify there before finalizing your budget.
Mortgage default insurance: the cost of going below 20%
Any down payment below 20% triggers mandatory mortgage default insurance — CMHC, Sagen, or Canada Guaranty. The premium scales with your loan-to-value ratio:
- ~2.80% premium for 15–20% down
- ~3.10% premium for 10–15% down
- ~4.00% premium for 5–10% down
The premium is added to your mortgage balance and amortized over the life of the loan — you pay it down as part of your mortgage payment, not in cash at closing. BUT: the 8% provincial portion of HST on the premium is payable in cash at closing in Ontario. On a $30,000 premium, that's $2,400 in cash on top of everything else.
The economic question buyers should weigh: is the extra $25,000–$50,000 of cash you'd put down (to clear 20%) better deployed as a closing-day buffer, in your TFSA, or against higher-rate debt? The "20% down avoids insurance" instinct is correct as written, but the insurance is usually a 3% drag on the loan — not a 30% drag — and the cash buffer is hard to replace.
Tax-advantaged accounts: FHSA, RRSP HBP, TFSA
Three accounts Toronto first-time buyers should know:
First Home Savings Account (FHSA)
Open since 2023. $8,000/year contribution room, $40,000 lifetime, deduction against income on the way in (like an RRSP), tax-free on the way out (like a TFSA) when used for a qualifying first home. A couple can stack two FHSAs for $80,000 lifetime.
RRSP Home Buyers' Plan (HBP)
Withdraw up to $60,000 from your RRSP (raised from $35,000 effective April 2024) for a first-home purchase, repayable over 15 years. A couple can stack for $120,000. Contributions must have been in the RRSP for at least 90 days before withdrawal.
Tax-Free Savings Account (TFSA)
2026 contribution room is $7,000 for the year; cumulative room varies by birth year. Not first-home-specific, but the tax-free growth makes the TFSA an efficient short-term down-payment account if your timeline is <3 years and FHSA / HBP room is already maxed.
The combination — FHSA, HBP, and TFSA — can produce a meaningful down payment even on modest annual savings. An accountant can stack them in the order that minimizes your tax bill.
Gifted down payments and family help
Down payment gifts from immediate family are common in Toronto and lenders accept them with a documented gift letter (signed by the giver, confirming the funds are a gift and not a loan). Most lenders require the gift to land in your account at least 30 days before closing.
Co-signers and guarantors are also common. A co-signer is on title and on the mortgage — they share both upside and risk. A guarantor backs the mortgage but isn't on title. The legal and tax consequences differ; everyone involved should talk to a lawyer before signing.
What "down payment" doesn't cover
The down payment is the cash you put toward the price. Closing costs are on top of, typically 3–4% of price — Land Transfer Taxes (double in Toronto), legal fees, title insurance, the HST on CMHC insurance, and the pre-paids you reimburse the seller for. Our closing costs guide breaks this down line by line.
The realistic question is "how much cash do I need at closing", not "how much is the down payment". For a $750,000 condo with 10% down, that's roughly $50,000 + $22,000 in LTT before rebates + ~$3,000 legal + ~$2,400 HST on insurance + pre-paids = ~$78,000 cash. Different from $50,000.
Frequently asked questions
Can I get a Toronto condo with 5% down?
Yes, on any condo priced at $500,000 or less. Between $500K and $1.5M, the minimum is 5% on the first $500K and 10% on the portion above. Above $1.5M, 20% is mandatory.
Is it worth putting 20% down to skip the insurance?
Sometimes. The insurance premium is roughly 2.8–4.0% of the loan, financed over the amortization. Twenty percent down also unlocks 30-year amortization on uninsured mortgages (insured mortgages on new builds have their own 30-year provisions). Talk to a mortgage broker with your real numbers — the "rule of thumb" answer can be wrong by tens of thousands of dollars.
Can I use my RRSP and FHSA at the same time?
Yes. The FHSA and the RRSP Home Buyers' Plan stack. Both must be used for a qualifying first home. The 90-day contribution rule applies to RRSP HBP withdrawals.
Does a gift from my parents count as down payment?
Yes, with a signed gift letter and the funds in your account well before closing (most lenders want 30+ days). The gift letter must state the funds are not a loan and are not repayable.
Talk to a Toronto Condo Broker
I'm Scott — a licensed Broker at Central Home Realty Inc., Brokerage, focused on the Toronto downtown condo market. If you have a question about anything you read here, send me a note. I read every message myself.