Short answer
The statutory minimum is generally 5% on the first $500,000 and 10% on the portion above $500,000 when the purchase price is below $1.5 million. At $1.5 million or more, the stated minimum is 20%. A lender or insurer can still require more.
The concern behind the question
The buyer has saved 5% and assumes every home and every file can close with that amount. The real question is whether the price, borrower, property, insurer and closing-cost reserve all fit the same plan.
What the current rule says
- At $500,000 or less, the published minimum down payment is 5% of the purchase price.
- Above $500,000 but below $1.5 million, it is 5% of the first $500,000 plus 10% of the portion above $500,000.
- At $1.5 million or more, the published minimum is 20%.
- A down payment below 20% normally means high-ratio mortgage insurance is required and both lender and insurer criteria apply.
- The deposit paid with the offer forms part of the down payment; it is not extra money. Legal fees, land transfer tax, adjustments and reserves are additional cash needs.
A practical Ontario example
Illustration only: On an $800,000 purchase, the formula produces $25,000 on the first $500,000 plus $30,000 on the remaining $300,000—a $55,000 minimum before closing costs. The buyer must still qualify and document the source of every dollar.
Where buyers get caught
- Applying 5% to the entire price above $500,000.
- Treating the lender’s minimum as the household’s ideal down payment.
- Using all savings for the down payment and leaving nothing for closing or repairs.
- Assuming gifted or borrowed funds will be accepted without conditions and documents.
Where the lender decision is separate
This program does not approve the mortgage. An A lender still applies its own income, credit, debt-ratio, down-payment and property rules. When the down payment is below 20%, the lender normally submits the file to a mortgage insurer, and the insurer must also accept it. An alternative or B lender may take a broader view of income or credit, but usually requires more equity and may charge a higher rate and fees. MIC and private financing is normally a short-term, equity-based route with a clearly costed exit—not a first-time-buyer benefit.
Rajiv would compare the available route, total cash needed, monthly payment, conditions and exit plan. Government eligibility and lender approval answer different questions.
Do not let good money create a documentation problem
Keep the full trail for the deposit, down payment and closing money. If there is a large deposit, transfer or gift in the account during the lender’s review period, keep the statements and documents showing where it came from. Do not move the same money through several accounts unless there is a reason and a complete trail. A tax program may allow a withdrawal, but the lender and lawyer still need acceptable proof of funds.
Facts, assumptions and professional roles
The linked government source describes the public program. It does not state an individual lender’s underwriting policy. A lawyer should confirm the purchase contract, title and land-transfer-tax treatment. An accountant or qualified tax professional should confirm personal tax consequences. Rajiv’s role is to connect the verified mortgage file, closing cash and property to lenders whose current policies may fit.
Source checked 2026-09-07: Read the official government source.
What Rajiv would review before you rely on this
- Which definition of “first-time buyer” applies to the exact program?
- Is the home new, resale, substantially renovated or owner-built?
- Will it be your principal residence, and when will you occupy it?
- Is the benefit credited at closing, claimed later, or dependent on another form?
- Does your mortgage file still qualify without counting an expected refund?
Related AskRajiv pathways
Continue through the First-Time Buyer Rules Hub, the Mortgage Knowledge Centre, or the Real Estate Centre. If an offer is already accepted, use the closing-problem pathway before removing a condition or missing a deadline.
Get the first-home strategy checked
A rule can save money and still leave a financing gap if the timing, documents or property do not fit. Book a First-Home Mortgage Strategy Session with Rajiv Verma, Mortgage Broker. Bring the purchase timeline, income documents, available cash, registered-plan statements and any builder paperwork. Rajiv can identify what is confirmed, what is assumed and what must be checked before you commit.