How much of a down payment do I need?

A down payment is the amount of money that you pay at the time of purchase toward the price of your home. Your mortgage loan covers the rest. You should have a good idea of how much you can put toward the down payment before talking to a potential lender or mortgage broker.

When you are at the stage of being ready to make an offer to buy a home, you will need to provide the seller with a deposit. The deposit forms part of your down payment, with the rest to be paid when you “close” the purchase of your new home.

The minimum down payment requirement depends on the purchase price of the home. For a purchase price of $500,000 or less, the minimum down payment is 5%. When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion.

The minimum down payment on investment properties and properties valued at $1,000,000 or more is 20%. Other situations, such as being self-employed or having poor credit may also impact the required down payment amount.