March 12, 2024

The Comprehensive Guide to the Average Down Payment on a House in Ontario

The Comprehensive Guide to the Average Down Payment on a House in Ontario

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Average Down Payment on a House in Ontario

When embarking on the journey of purchasing a home, understanding the nuances of down payments is crucial. In Ontario, the average down payment on a house reflects both the vibrant real estate market and the diverse financial capabilities of homebuyers. Everything Mortgages, with a wealth of experience and a client-focused approach, is here to guide you through the complexities of mortgage down payments, ensuring your path to homeownership is as smooth as possible.

What is a Down Payment?

A down payment is the initial, upfront payment made when buying a home, usually represented as a percentage of the total purchase price. It’s a crucial component of the mortgage process, serving as a demonstration of your financial commitment to lenders. The size of a down payment can significantly influence the terms of your mortgage, including interest rates and monthly payments.

Average Down Payment on a House in Ontario

In Ontario, the average down payment varies widely, influenced by factors such as property prices and buyer demographics. Generally, homebuyers in Ontario can expect to put down between 5% to 20% of the purchase price. This range is reflective of both minimum requirements set by lenders and the strategic choices of buyers aiming to minimize mortgage insurance costs.

While the average down payment percentage in Ontario hovers around 10%, it’s important to note that this can vary depending on the specific location within the province. For instance, in Toronto, where property prices tend to be higher, a larger down payment may be necessary to secure a mortgage.

Factors Influencing the Average Down Payment in Ontario

The average down payment in Ontario is shaped by several factors:

  • Property Prices: With some of Canada’s highest property prices, particularly in Toronto and surrounding areas, down payments in Ontario can be substantial. Higher property prices often require larger down payments to meet lender requirements and secure favorable mortgage terms.
  • Market Conditions: A competitive market often encourages larger down payments to strengthen purchase offers. When multiple buyers are vying for the same property, a higher down payment can make your offer more attractive to sellers and increase the likelihood of acceptance.
  • Buyer Financial Profiles: The average down payment can also be influenced by the financial profiles of homebuyers. Those with stronger financial positions may opt for higher down payments to reduce their mortgage principal and monthly payments.

Minimum Down Payment Requirements in Ontario

The minimum down payment in Ontario is determined by the purchase price of the home:

  • Homes priced at $500,000 or less require a minimum down payment of 5%. For example, if you’re buying a home for $400,000, your minimum down payment would be $20,000 (5% of $400,000).
  • For homes priced between $500,000 and $1 million, the minimum down payment is 5% of the first $500,000 plus 10% of the remaining balance. For instance, if you’re purchasing a home for $800,000, your minimum down payment would be $55,000 (5% of $500,000 plus 10% of $300,000).
  • Homes over $1 million require a 20% down payment. If you’re buying a home for $1.5 million, your minimum down payment would be $300,000 (20% of $1.5 million).

It’s important to note that while these are the minimum requirements, homebuyers can choose to put down a larger down payment if they wish. A larger down payment can help reduce mortgage insurance costs and potentially secure more favorable mortgage terms.

Down Payment Rules for First-Time Homebuyers

First-time homebuyers in Ontario have access to several programs aimed at easing the down payment burden:

  • Home Buyers’ Plan (HBP): This program allows first-time homebuyers to withdraw up to $35,000 from their registered retirement savings plan (RRSP) to use as a down payment. The withdrawn amount must be repaid within 15 years to avoid tax implications.
  • First-Time Home Buyer Incentive: The Government of Canada offers a shared-equity mortgage program that provides eligible first-time homebuyers with a loan to help with the down payment. The loan amount is up to 5% for existing homes or up to 10% for newly constructed homes. This program aims to reduce mortgage payments without adding to the financial burden of saving for a larger down payment.

These programs can be valuable resources for first-time homebuyers, helping them overcome the initial financial challenges of purchasing a home.

How to Calculate Your Down Payment

Calculating your down payment involves considering the purchase price of your desired home and the down payment percentage you aim to provide. For example, a $500,000 home with a 10% down payment would require $50,000 upfront.

To simplify this process, you can use online mortgage calculators or consult with a mortgage professional. They can help you determine the down payment amount based on your financial situation, desired monthly payments, and the mortgage options available to you.

Saving for a Down Payment in Ontario

Saving for a down payment in Ontario can be challenging but manageable with the right strategies:

  • Automatic Savings Plans: Set up automatic transfers from your checking account to a dedicated savings account specifically for your down payment. This approach ensures consistent contributions without the temptation to spend the funds elsewhere.
  • High-Interest Savings Accounts (HISAs) or Tax-Free Savings Accounts (TFSAs): These accounts offer growth potential for your savings while keeping them easily accessible when you’re ready to make your down payment. Compare different financial institutions to find the best interest rates and terms.
  • Reduce Expenses and Increase Income: Review your monthly expenses and identify areas where you can cut back. Consider taking on a side gig or freelance work to boost your income temporarily, allowing you to save more aggressively.

The Impact of Down Payment on Mortgage Payments

The size of your down payment can have a significant impact on your monthly mortgage payments. A larger down payment reduces the principal amount borrowed, leading to lower monthly payments and potentially saving thousands in interest over the life of the loan.

For example, let’s consider two scenarios for a $500,000 home:

  1. Scenario 1: You make a 5% down payment of $25,000. With a 25-year mortgage at a 3% interest rate, your monthly mortgage payment would be approximately $2,165.
  2. Scenario 2: You make a 20% down payment of $100,000. With the same mortgage terms, your monthly payment would be approximately $1,730.

By increasing your down payment from 5% to 20%, you could save around $435 per month, resulting in substantial long-term savings.

Additionally, down payments of 20% or more eliminate the need for mortgage loan insurance, which is typically required when the down payment is less than 20% of the purchase price. Mortgage loan insurance protects the lender in case of default but adds an additional cost to your monthly payments.

By aiming for a larger down payment, you not only reduce your monthly mortgage payments but also potentially save on insurance premiums and long-term interest costs.

Down Payment Assistance Programs in Ontario

Several assistance programs are available to help Ontarians with their down payments:

  • The Homeownership Program: This program offers a forgivable loan for the down payment to eligible buyers in certain municipalities. The loan amount varies depending on the location and program guidelines. It provides an extra boost to those who may be struggling to save for a larger down payment.
  • The First-Time Home Buyer Incentive: In addition to helping with the down payment, this program offers a shared-equity mortgage, reducing monthly mortgage payments. The loan amount is up to 5% for existing homes or up to 10% for newly constructed homes.

These programs are designed to support homebuyers in achieving their homeownership goals, particularly those who may face financial constraints when saving for a down payment.

Everything Mortgages Solutions for Down Payments

At Everything Mortgages, we understand the challenges and opportunities associated with down payments. Our services are designed to support a wide range of homebuyers, ensuring everyone can navigate the down payment process with confidence. Our solutions include:

  • Self-Employed Mortgage: Financing strategies designed for consultants, contractors, and small business owners who may have unique down payment considerations. We understand the complexities of self-employment and can help you find the right mortgage solution.
  • First-Time Homebuying: Tools and advice specifically tailored to first-time homebuyers to navigate the financial decision of buying a home and understanding the down payment requirements. We’ll guide you through the process and help you access any available first-time homebuyer programs.
  • Mortgage Refinance: Services to renegotiate existing mortgage terms, secure better rates, and potentially access equity for a larger down payment. If you already own a home and are looking to refinance, we can explore options to help you achieve your financial goals.
  • Bad Credit Mortgage: Assistance for individuals with new or bruised credit, including programs to help them secure a mortgage and work towards saving for a down payment. We believe that everyone deserves the opportunity to own a home, and we’ll work with you to find the right solution.

Our team of professional and licensed mortgage agents is dedicated to simplifying the mortgage process for our clients, providing personalized advice and solutions tailored to their unique needs. We work with a variety of lending institutions to get the best rates and loan options, saving our clients time and money.

Why Choose Everything Mortgages for Your Home Loan

Choosing Everything Mortgages means opting for a stress-free, personalized mortgage experience. Our proven track record, combined with our commitment to securing the best rates and terms for our clients, makes us the ideal partner in your home buying journey. Here’s why you should choose us:

  • Simplified Process: Forget the tedious phone calls and lengthy email threads. Our online process makes getting a mortgage easy and convenient, saving you time and reducing stress. Apply online in minutes, and our team will guide you through the rest of the process.
  • Extensive Lender Network: We work with over 35+ lending institutions, ensuring we can find you the best rate and loan option that suits your unique needs. Our extensive network saves you time and potentially thousands of dollars over the life of your mortgage.
  • Personalized Service: At Everything Mortgages, we represent your interests and support your goals. Your personal mortgage advisor will work closely with you, providing personalized advice and finding the mortgage solution that best suits your needs.
  • Proven Track Record: With 5,000+ mortgages under our belt, we’re confident we can help you navigate the down payment process and secure the mortgage you need to achieve your homeownership dreams.


The average down payment on a house in Ontario is a critical aspect of the home buying process, impacting everything from loan terms to monthly payments. By understanding the factors that influence down payments, utilizing available resources and assistance programs, and partnering with a trusted mortgage advisor like Everything Mortgages, Ontarians can navigate this step more effectively and confidently. Take the next step towards homeownership by contacting Everything Mortgages for a consultation or applying online today.

Call to Action

Ready to take the next step towards homeownership in Ontario? Contact Everything Mortgages today for a consultation or apply online to start the process with a team that puts your needs first.

At Everything Mortgages, we strive to help first-time homebuyers, small business owners, and hardworking professionals navigate their mortgage journeys. Whether it’s securing a loan or seeking better solutions, our team is here to guide you toward becoming mortgage-free sooner and building wealth faster. Reach out to us today to explore these strategies and more.

Note: This article is intended for informational purposes only and does not constitute financial advice. Please consult a financial advisor or mortgage professional before making decisions about your mortgage.

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