Get In With Less Up Front
Low Down Payment Mortgages
You do not need 20% down to buy your first home. With mortgage default insurance, qualified first-time buyers can purchase with as little as 5% down — here is exactly how the rules work and how to combine them with assistance programs.
The minimum down payment rules
The single most common myth in real estate is that you need a 20% down payment to buy. In reality, Canada’s rules are tiered by price, and most first-time buyers in Niagara fall squarely in the lowest tier. Here is how it breaks down:
| Purchase price | Minimum down payment |
|---|---|
| Up to $500,000 | 5% of the purchase priceA $400,000 home needs $20,000 down. |
| $500,000 to $1,500,000 | 5% on the first $500,000 + 10% on the portion aboveAn $800,000 home needs $25,000 + $30,000 = $55,000 down. |
| $1,500,000 and over | 20% of the purchase priceInsured low-down-payment financing is not available at this level. |
How mortgage default insurance makes it possible
When you put down less than 20%, your lender requires mortgage default insurance. This insurance protects the lender — not you — but it is the mechanism that lets banks offer a mortgage with only 5% down. The premium is calculated as a percentage of your mortgage and is usually added onto the loan, so it is spread across your regular payments rather than paid in a lump sum at closing.
For most first-time buyers, that small premium is well worth the chance to stop renting years earlier. A mortgage professional can show you the exact premium for your price point and how it affects your monthly payment.
Stretch a small down payment even further
A low down payment mortgage pairs naturally with the rest of the first-time buyer toolkit. Cover your 5% with tax-free savings from the FHSA and Home Buyers’ Plan, bridge the gap with a Welcome Home Niagara forgivable loan, and recover closing costs with the land transfer tax refund. See how it all fits in our down payment programs overview, then browse homes under $500K where just 5% down gets you in the door.
Frequently asked questions
What is the minimum down payment in Canada?
For homes priced up to $500,000 the minimum is 5%. Between $500,000 and $1,500,000 it is 5% on the first $500,000 plus 10% on the portion above that. At $1,500,000 and over, you need at least 20% down and cannot use mortgage default insurance.
What is mortgage default insurance?
When you put down less than 20%, lenders require mortgage default insurance (often called CMHC insurance, though there are other providers). It protects the lender if you default, which is what allows them to offer a mortgage with a small down payment. The premium is added to your mortgage and paid off over time.
Can I use a down payment program with a 5%-down mortgage?
Often, yes. Forgivable down payment loans like Welcome Home Niagara or Hamilton's DPAP, and tax-free savings withdrawn through the FHSA or Home Buyers' Plan, can typically be used as part of your down payment alongside an insured mortgage. Your lender confirms how each source counts toward the minimum.
Is a bigger down payment always better?
Not necessarily. A larger down payment lowers your monthly payment and can reduce or eliminate insurance premiums, but waiting years to save 20% can mean paying more rent and missing price appreciation. For many first-time buyers, getting in sooner with 5% down and assistance programs is the better financial move — a mortgage professional can run both scenarios for you.
This page is general information from Davids & DeLaat, REMAX Niagara Realty Ltd., and is not financial or mortgage advice. Minimum down payment rules and mortgage default insurance requirements are set by federal regulators and insurers and can change. Confirm your situation with a licensed mortgage professional before relying on these figures.
Talk to a local agent
Find out how little you really need to buy
We will connect you with a mortgage professional to confirm your minimum down payment and pre-approval — then help you find homes that fit in Niagara.
Prefer to talk it through? Call the team or send a message.
Explore other buyer resources
Keep planning your first purchase with these related guides and live Niagara searches.
- Full Down Payment Programs Overview — compare every program
- DPAP Hamilton — for buyers considering Hamilton instead
- Ontario New-Home HST Rebate 2026 guide
- Get pre-approved for a mortgage — the required first step
- Niagara homes under $500K — matches the 5% down threshold
- Newly built Niagara homes — candidates for the HST rebate
- Set up an automated buying agent — instant new-listing alerts
- Buying with Davids & DeLaat — how our team makes it easy