The amount of your down payment will determine if you have a conventional or high-ratio mortgage. Here’s the difference…

Conventional mortgage means your down payment is at least 20% of the purchase price of the home.

High-ratio mortgage means your down payment is less than 20% of the purchase price, which means you must get your mortgage insured.

With a high-ratio mortgage, a mortgage insurer such as the Canada Mortgage and Housing Corporation (CMHC) will need to insure your mortgage at an added premium.

Legal fees These are lawyer/notary fees and disbursements that you’re responsible for paying during the purchase process. Your lawyer or notary should be involved in the purchase process as early as possible because they will act on your behalf during the purchase and mortgaging of the property, and can give you good insights and advice.

Insurance Premiums The insurance premium will depend on the amount you’re borrowing and the percentage of your down payment. Usually insurance premiums range between 0.5% and 4.25% of the mortgage amount. This can be paid at the time of purchase, or added to the principal amount of your mortgage. As of 2016, the minimum down payment for new mortgages has been modified to this new breakdown:

  • Homes with a purchase price less than or equal to $500,000, homebuyers must put a minimum of 5% down.
  • For homes with a purchase price greater than $500,000 and less than 1 million, the minimum down payment is 5% of the first $500,000, plus 10% of the remaining balance.
  • For homes with a purchase price of 1 million or more, the minimum down payment is 20%.