Down payment below 20%
On an eligible owner-occupied home below $1.5 million, the lender typically arranges mortgage loan insurance when your down payment is less than 20%. The premium is based partly on the loan-to-value ratio.
Mortgage loan insurance is typically required when you buy an eligible home with a down payment below 20%. Mortgage life, disability, critical illness, and job-loss insurance are different products and remain optional.
For an owner-occupied home priced below $1.5 million, a down payment under 20% usually means the lender must obtain mortgage default insurance. At $1.5 million or more, the minimum down payment is 20%, so a standard high-ratio insured mortgage is not available.
Insurance eligibility does not guarantee mortgage approval. You must still satisfy the lender’s and insurer’s income, debt, credit, property, and qualification requirements.
Start with the purchase price and down payment. Then check occupancy, amortization, and whether the property meets the insurer’s standards.
On an eligible owner-occupied home below $1.5 million, the lender typically arranges mortgage loan insurance when your down payment is less than 20%. The premium is based partly on the loan-to-value ratio.
A mortgage with at least 20% down is normally considered conventional. You generally do not pay a high-ratio mortgage-insurance premium, although the lender may still insure the loan or require insurance in a higher-risk situation.
Standard government-backed high-ratio mortgage insurance is not available at or above the $1.5 million price threshold. The buyer therefore needs at least 20% down and must meet the lender’s uninsured-mortgage criteria.
Non-owner-occupied rentals, properties with three or four units, seasonal access, leasehold interests, major repairs, or other non-standard features may have different down payment and insurance requirements. Confirm the exact program before removing a financing condition.
The federal minimum is not a promise of approval. A lender or mortgage insurer may require more equity when the borrower, property, income documentation, credit history, or transaction does not fit standard criteria.
For homes below $1.5 million, the minimum is 5% of the first $500,000 plus 10% of the portion above $500,000.
Minimum down payment: 5% of $450,000. Mortgage loan insurance would typically be required.
$25,000 on the first $500,000 plus $25,000 on the remaining $250,000.
$25,000 on the first $500,000 plus $70,000 on the remaining $700,000.
At the insured-mortgage price cap, the buyer needs at least 20% down rather than the high-ratio formula.
The amount needed for closing is higher than the down payment alone. Keep separate funds for legal costs, adjustments, land transfer tax where applicable, inspections, moving, and provincial tax on the insurance premium where charged.
“Mortgage insurance” is often used for products that protect different people and solve different risks.
Protects the lender if the borrower defaults and the property sale does not fully repay the insured mortgage.
May pay the insured mortgage balance to the lender after an approved death claim.
Protects the building against specified insured risks. Lenders commonly require evidence of suitable property coverage before advancing mortgage funds.
Having the minimum down payment is only the first screen. The lender submits the application and the mortgage insurer must accept the borrower, property, and transaction.
Use the pricing guide to understand the information that can affect the premium and monthly carrying cost.
Document the source of the down payment and keep enough accessible cash for closing costs that cannot be rolled into the mortgage.
The lender reviews income stability, housing costs, other debt, credit, and the required mortgage qualifying rate.
The insurer may review the purchase price, appraisal, occupancy, condition, location, access, unit count, and intended use.
The premium can usually be added to the mortgage, increasing the balance and interest paid; applicable provincial sales tax is paid separately.
The rule is national, but local home prices, property types, taxes, and closing costs change how much cash a buyer needs and whether the insured route is practical.
In higher-priced neighbourhoods, a property just below the insured limit may qualify with the tiered minimum down payment, while a property at or above $1.5 million requires at least 20% down. Buyers should also preserve cash for substantial closing costs rather than using every available dollar for the deposit.
An insured mortgage can let a buyer enter with less than 20% down, but the premium increases the mortgage balance. Compare the insured payment with the value of keeping funds available for repairs, furnishings, childcare, transportation, and an emergency reserve.
Minimum down payment is only one part of affordability. The lender also considers housing costs, and the buyer needs funds for legal or notarial work, adjustments, applicable transfer duties or taxes, moving, and unit-owner insurance.
Year-round occupancy, access, condition, servicing, marketability, and the property type may affect the lender’s or insurer’s decision. Obtain financing and insurance confirmation before treating the minimum-down-payment formula as sufficient.
Buyers still need mortgage loan insurance when their down payment is below 20%, but some insured borrowers can use a longer amortization.
Eligible first-time buyers with an insured mortgage may use a maximum amortization of 30 years, subject to the program rules.
Eligible purchasers of newly constructed homes may also access a 30-year insured amortization, even when they are not first-time buyers.
The usual maximum amortization is 25 years when the down payment is below 20% and neither 30-year eligibility path applies.
Existing insured borrowers may shop among lenders at renewal without another mortgage stress test when the switch meets the applicable straight-switch rules.
Compare the monthly payment, premium, total borrowing cost, prepayment options, and the time needed to build equity rather than selecting a 30-year amortization from the payment alone.
Use current federal and insurer guidance, then confirm the final answer with the lender handling the actual property and application.
Review the current minimum-down-payment formula, insured-mortgage threshold, premium overview, and situations where a lender may request more equity.
Read FCAC guidanceConfirm the 30-year insured-amortization paths for first-time buyers and new-build purchasers and the standard 25-year limit in other insured cases.
Review amortization rulesConfirm that mortgage life, disability, critical illness, and job-loss insurance are optional products requiring your consent.
Read consumer rightsMove from the requirement rule to premiums, product definitions, optional protection, support, or a personalized comparison.
Estimate the mortgage default-insurance premium using the purchase price and planned down payment.
Estimate the premium →Review mortgage default insurance, lender protection, premiums, eligibility, and common terminology.
Read the overview →See which mortgage and borrower details can affect the premium and broader protection costs.
Review pricing →Understand the optional coverage that may pay the lender after an approved death claim.
Review life coverage →Find direct answers about mortgage insurance, optional protection, claims, quotes, and policy changes.
View FAQs →Use the support path when your property, occupancy, renewal, or lender requirement does not fit the standard examples.
Open support →Direct answers for buyers, first-time purchasers, renewing borrowers, and homeowners comparing default insurance with optional protection.
It is typically required for an eligible high-ratio mortgage. The home must be below the insured-mortgage price cap, and the borrower, property, occupancy, loan, and transaction must satisfy the lender’s and mortgage insurer’s standards.
Usually, yes. With at least 20% down, the mortgage is normally conventional and you do not pay the standard high-ratio insurance premium. A lender may still obtain insurance for its own risk management or require insurance in a non-standard case.
No. Mortgage life, disability, critical illness, and job-loss insurance are optional. A lender cannot require you to purchase these optional products as a condition of approving the mortgage, and your express consent is required.
The current minimum is $75,000: 5% of the first $500,000, which is $25,000, plus 10% of the remaining $500,000, which is $50,000. Because that is below 20%, mortgage loan insurance would typically be required.
Standard high-ratio mortgage insurance is not available at or above $1.5 million, so the buyer needs at least 20% down. On a $1.5 million purchase, that minimum is $300,000, plus separate closing costs.
No. First-time buyer status does not remove the insurance requirement when the down payment is below 20%. It may make an eligible insured borrower able to choose a 30-year amortization.
The premium can usually be added to the mortgage principal, which increases the amount borrowed and the interest paid. Provincial sales tax charged on the premium in Ontario, Quebec, or Saskatchewan cannot be added to the insured loan and is paid separately.
A normal renewal does not usually create a new full insurance premium. Existing insured status may continue, and qualifying insured borrowers may switch lenders at renewal under applicable straight-switch rules. Refinancing, increasing the loan, changing the property, or changing occupancy can lead to different treatment.
The lender submits the insurance application to an approved mortgage insurer. The borrower provides the income, credit, down payment, property, and transaction documents needed for the lender and insurer to make their decisions.
No. You still need to meet the lender’s and insurer’s rules for income, debt-service ratios, credit, down payment, property eligibility, purchase price, occupancy, and the mortgage qualifying rate.
Share the purchase price, location, property type, occupancy, planned down payment, buyer status, and timeline. Use those facts to separate the mandatory lender protection from any optional life or payment coverage.
