OTTAWA REAL ESTATE
How Much Down Payment Do You Need to Buy a House in Ottawa?
How Much Do You Need for a Down Payment on a House? The minimum down payment to buy a house in Ottawa is 5% on the first $500,000 of the purchase price, 10% on the portion between $500,000 and $1.5 million, and 20% on homes priced at $1.5 million or more. A down payment under 20% is allowed but requires mortgage default insurance.
Recent federal changes matter here. Since December 15, 2024, insured mortgages are available on homes up to $1.5 million, and 30-year amortizations are available to all first-time buyers and buyers of newly built homes, both of which lower the barrier to ownership. These changes were set out in amendments to the federal mortgage regulations.
Jason Polonski is a full-time Ottawa and Kanata REALTOR® with Right at Home Realty who helps buyers plan the right down payment for their situation. Buyers can reach him by phone at (613) 601-9333 or by email at polonskiottawa@gmail.com.
Minimum Down Payment Rules in Canada
Canada sets minimum down payments on a sliding scale based on the purchase price. The rules are national, applied by the Canada Mortgage and Housing Corporation and enforced by lenders.
| Purchase price | Minimum down payment |
|---|---|
| $500,000 or less | 5% of the price |
| $500,001 to $1,499,999 | 5% on the first $500,000, plus 10% on the rest |
| $1,500,000 or more | 20% of the price |
A down payment below 20% is permitted up to a price of just under $1.5 million, but it requires mortgage default insurance. At $1.5 million and above, insurance is not available, so a full 20% is mandatory.
The Financial Consumer Agency of Canada offers neutral guidance on these minimums and how they affect the mortgage.
Down Payment Examples for Ottawa Homes
The tiered formula is easiest to understand with real price points. Current Ottawa prices, published monthly by the Ottawa Real Estate Board, help buyers see which tier applies to the homes they are considering.
The table below shows the minimum down payment at several common Ottawa price levels.
| Home price | Minimum down payment | Effective percentage |
|---|---|---|
| $500,000 | $25,000 | 5.0% |
| $700,000 | $45,000 | 6.4% |
| $900,000 | $65,000 | 7.2% |
| $1,000,000 | $75,000 | 7.5% |
| $1,200,000 | $95,000 | 7.9% |
| $1,500,000 | $300,000 | 20.0% |
The jump at $1.5 million is significant: a $1.2 million home needs about $95,000 down, while a $1.5 million home needs $300,000. Buyers shopping near that threshold should understand how much it changes the cash required.
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How Mortgage Default Insurance Works
When the down payment is under 20%, the mortgage must be insured, which protects the lender if the borrower defaults. The premium is added to the mortgage and paid over time, not upfront.
Premiums scale with the size of the down payment, as shown below. A larger down payment means a smaller premium.
| Down payment | Insurance premium (of loan) |
|---|---|
| 5% to 9.99% | 4.00% |
| 10% to 14.99% | 3.10% |
| 15% to 19.99% | 2.80% |
| 20% or more | None |
There is an important Ontario detail: the province charges 8% provincial sales tax on the insurance premium, and that tax must be paid in cash at closing rather than added to the mortgage. Buyers should budget for it alongside their other closing costs.
Get Cash Back When You Buy a Home in Ottawa
Can you get cash back when buying a home in Ottawa? Yes. Jason Polonski, a Chairman's Club REALTOR® serving Ottawa and Kanata, shares part of his commission with buyers — up to $3,000 cash back at closing.* You still get full-service, award-winning representation: expert pricing, sharp negotiation, and hands-on guidance from first showing to keys in hand. No cut corners and no rebate-only shortcuts — just real money back in your pocket when you buy your Ottawa or Kanata home.
Should a Buyer Put Down 5%, 10% or 20%?
Each option involves a trade-off between upfront cash and long-term cost. A 5% down payment preserves savings but adds the largest insurance premium and the highest monthly payments.
A 20% down payment removes insurance entirely, lowers the monthly payment, and can strengthen an offer in a competitive situation. The trade-off is tying up more cash that might otherwise cover closing costs, repairs or an emergency fund.
There is no single right answer. For many Ottawa buyers, putting down enough to keep a healthy cash reserve is wiser than draining savings to reach 20%, and Jason helps buyers find that balance for their circumstances.
First-Time Buyer Down Payment Programs
First-time buyers in Ontario have several tools to build a down payment faster. Used together, they can add tens of thousands of dollars toward a purchase.
The First Home Savings Account allows tax-deductible contributions of up to $8,000 a year, to a lifetime limit of $40,000, with tax-free withdrawals for a qualifying home. The RRSP Home Buyers’ Plan allows a tax-free withdrawal of up to $60,000 per buyer, repaid over 15 years.
One correction worth noting: the former federal First-Time Home Buyer Incentive has been discontinued, so it is no longer part of the plan. First-time buyers can also recover up to $4,000 of the provincial land transfer tax, and full details are on Jason’s Ottawa first-time home buyers guide and his first-time home buyer tips.
Can a Down Payment Be a Gift?
Yes. A down payment can come from a gift, most commonly from an immediate family member, which is a common way Ottawa buyers reach their minimum.
Lenders require a signed gift letter confirming the money is a genuine gift and not a loan that must be repaid. The funds usually need to be in the buyer’s account before closing, and the lender may ask for supporting documentation.
Planning gifted funds early prevents last-minute delays. Jason helps buyers coordinate the timing so the paperwork is ready when the lender needs it.
Costs Beyond the Down Payment
The down payment is not the only cash a buyer needs at closing. Closing costs typically add another 1.5% to 4% of the purchase price and include land transfer tax, legal fees, title insurance and the home inspection.
In Ontario, buyers pay provincial land transfer tax but, unlike Toronto, no municipal land transfer tax, and first-time buyers can claim a refund of up to $4,000 through the Ontario land transfer tax refund. Budgeting for these costs alongside the down payment prevents a shortfall.
Comparing the full upfront cost against current rent helps buyers decide when to move, a question Jason’s renting versus buying in Ottawa guide addresses.
How Rates and the Stress Test Affect Affordability
The down payment sets the entry point, but interest rates and the stress test determine how much a buyer can actually borrow. Buyers must qualify at the higher of their contract rate plus two percentage points or 5.25%.
Rate movements change both affordability and competition, so the Bank of Canada’s key interest rate is worth watching. Confirming the true budget early through a mortgage pre-approval keeps the search realistic.
The extended 30-year amortization now available to first-time buyers and new-build buyers lowers the monthly payment, though it increases total interest over the life of the loan. It is a trade-off between monthly affordability and long-term cost.
Common Down Payment Mistakes
A few avoidable mistakes catch Ottawa buyers repeatedly. The most common is draining every dollar of savings to reach 20%, which leaves no cushion for closing costs or emergencies.
Others include forgetting to budget for closing costs and the Ontario PST on mortgage insurance, and shopping for homes before getting pre-approved. Each can derail a purchase or force a rushed decision.
Jason’s guide to mistakes to avoid when buying a home covers these and other pitfalls, so buyers can plan around them from the start.
How Jason Polonski Helps Ottawa Buyers
Down payment planning sits at the intersection of budgeting, financing and strategy, and Jason brings a finance background to all three. Hundreds of buyers and sellers across Ottawa have trusted him with their purchases.
A Bachelor of Commerce in Marketing and Finance sharpens the numbers side, while his construction and electrical trades experience helps buyers weigh how much to keep in reserve for a home’s condition and future repairs.
He has been recognized as Best in Ottawa Top REALTOR® for 2026, seven years running, along with Top Choice REALTOR® honours for Kanata and Stittsville. More is on the About Jason Polonski page, and current reviews are on his Google Business Profile.
Ready to Plan a Down Payment for Ottawa?
The right down payment balances upfront cash against long-term cost, and a local REALTOR® who understands both makes the decision far easier. Jason Polonski helps buyers set a realistic number and a clear savings plan.
A short, no-obligation conversation about budget, timeline and goals is the best place to begin. Buyers can reach Jason directly by phone at (613) 601-9333 or by email at polonskiottawa@gmail.com, or return to the full buying a house in Ottawa guide for more.
How Much Do You Need for a Down Payment (FAQs)
The minimum is 5% on the first $500,000 of the price, 10% on the portion between $500,000 and $1.5 million, and 20% on $1.5 million or more. A down payment under 20% requires mortgage default insurance.
No. Twenty percent is only required on homes priced at $1.5 million or more. Below that, buyers can put down as little as 5% on the first $500,000, provided they carry mortgage default insurance.
A $700,000 home requires $45,000 down, which is 5% on the first $500,000 ($25,000) plus 10% on the remaining $200,000 ($20,000). That works out to about 6.4% of the price.
The premium ranges from 2.8% to 4% of the mortgage amount, depending on the down payment, and it is added to the mortgage. In Ontario, 8% provincial sales tax on the premium must also be paid in cash at closing.
Yes. Gifted funds, usually from an immediate family member, are allowed with a signed gift letter confirming that the money does not need to be repaid. The funds generally must be in the buyer’s account before closing.
Buyers should plan for the minimum down payment plus roughly 1.5% to 4% of the price in closing costs, and ideally a small reserve for moving and repairs. Draining savings to reach 20% is usually a mistake.
It can. A larger down payment signals financial strength and reduces financing risk, which sellers value in competitive situations. It also lowers monthly payments and eliminates insurance at 20%.
Buyers can reach out by phone at (613) 601-9333 or by email at polonskiottawa@gmail.com. Jason begins with a no-obligation conversation about budget, timeline and goals before the search begins.
