How big a down payment do I really need as a newcomer?
Answered by Rajiv Verma, Mortgage Broker · Reviewed 18 August 2026 · About a 3 minute read
The direct answer
The same minimum as everyone else — there is no newcomer penalty. On an insured mortgage that’s 5% on the first $500,000, and 10% on the portion between $500,000 and $1.5 million. Putting 20% down opens more doors and avoids mortgage insurance, but it is not required. Many newcomers buy with far less than they expect to need.
THE SHORT VERSION
- 5% on the first $500,000
- 10% on the portion from $500,000 to $1.5 million
- Insured mortgages are available up to a $1.5 million purchase price
- 20% avoids mortgage insurance and widens lender choice — but isn’t required
- Newcomer programmes use the same minimums, not higher ones
How it actually calculates
It’s tiered, not a flat percentage — which trips people up.
| Purchase price | Minimum down payment |
|---|---|
| $500,000 | $25,000 — 5% |
| $700,000 | $45,000 — 5% of $500k, then 10% of $200k |
| $900,000 | $65,000 — 5% of $500k, then 10% of $400k |
Illustrative. Insurance premium, closing costs and land transfer tax are additional.
On a $700,000 home in the GTA, that’s $45,000 — not $140,000. The gap between those two numbers is why a lot of newcomers spend years renting when they didn’t need to.
What else you need beyond the down payment
Closing costs. Legal fees, title insurance, adjustments. Budget for these separately.
Land transfer tax. Ontario charges it, and Toronto charges a second one on top. First-time buyer rebates exist and are worth asking your lawyer about — many newcomers qualify.
Mortgage insurance premium. On anything under 20% down. It’s usually added to the mortgage rather than paid upfront.
Some lenders want to see reserves — money left over after closing. Arriving with nothing behind you is a weaker file even when the down payment is technically sufficient.
Is 20% worth aiming for?
Sometimes, and often not.
For: no insurance premium, more lender choice, lower payment, and a stronger file if credit or income are thin.
Against: years of extra saving while prices and rents move. The cost of waiting is real and rarely counted.
The honest test isn’t the percentage. It’s whether the payment works — against a bad month, not an average one.
When to wait
When the payment is uncomfortable at 5%. A larger deposit reduces it. So does a cheaper property.
When the funds aren’t documented. Money without a paper trail isn’t usable, regardless of the amount.
When there’s nothing left afterwards. Emptying every account to reach the minimum leaves no margin, and newcomer households often face unexpected costs in the first year.
What to check
- The tiered minimum for the price range you’re actually looking at
- Whether your funds are documented and seasoned
- Closing costs and land transfer tax, budgeted separately
- Whether you qualify for a first-time buyer rebate
- What’s left over after closing
What to do next
Tell me your price range and what you’ve saved. I’ll give you the real number — down payment, closing costs and land transfer tax together — so you know what you’re actually aiming at.
Most newcomers I speak to have been aiming at a number far higher than they needed.
Related questions
- Can I use my savings from overseas for the down payment?
- I just moved here and have no Canadian credit history. Can I get a mortgage?
- What credit score do I need for a mortgage in Ontario?
Answered by Rajiv Verma, Mortgage Broker · Mortgage Architects — FSRA Brokerage Licence #12728 · Licensed in Ontario · Office 289.505.0631 · Direct 647.291.7116
General information about Ontario mortgages — not financial, legal or tax advice. Down payment rules, insurance limits and rebates are set by government and insurers and change over time. Figures shown are illustrative. Speak to a real estate lawyer about land transfer tax and rebates. Every file is reviewed individually.