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How Much Do You Really Need for a Down Payment in Scarborough, Markham & Richmond Hill?
Introduction
Buying a home is one of the biggest financial commitments you’ll make, and the down payment is often the first big hurdle. But how much do you actually need to save? The answer depends on factors like the price of the home, mortgage rules, and the type of loan you qualify for.
In this guide, we’ll break down the minimum down payment requirements, the benefits of a larger down payment, and tips to save for one faster in Scarborough, Markham, and Richmond Hill.
1. Minimum Down Payment Requirements in Canada
In Canada, the minimum down payment varies based on the price of the home:
- Homes under $500,000 → 5% down payment
- Homes between $500,000 – $999,999 → 5% on the first $500,000, 10% on the remaining amount
- Homes $1M+ → Minimum 20% down payment
For example, if you’re buying a $750,000 home:
- First $500,000 = $25,000 down (5%)
- Remaining $250,000 = $25,000 down (10%)
- Total down payment: $50,000 (6.7%)
2. What If You Put Down Less Than 20%? (Mortgage Default Insurance)
If your down payment is less than 20%, you are required to purchase mortgage default insurance (also known as CMHC insurance).
- This insurance protects the lender in case you default on the loan.
- It is added to your mortgage and can increase your monthly payments.
- The cost of CMHC insurance depends on your down payment percentage, ranging from 2.8% to 4% of your mortgage amount.
💡 Tip: A down payment of 20% or more means you don’t have to pay mortgage insurance, saving you thousands over the life of the loan.
3. Average Home Prices in Scarborough, Markham & Richmond Hill (2025)
Here’s a quick look at estimated home prices and how much you’d need for a down payment based on current market trends:
| City | Avg. Home Price | 5% Down Payment | 20% Down Payment |
|---|---|---|---|
| Scarborough | $850,000 | $60,000 | $170,000 |
| Markham | $1,100,000 | $85,000 | $220,000 |
| Richmond Hill | $1,250,000 | $105,000 | $250,000 |
🔍 Note: Prices fluctuate, so it’s important to check recent market reports or talk to a real estate agent (like me!) for up-to-date information.
4. Benefits of a Larger Down Payment
If you can save more than the minimum, here’s how it benefits you:
✅ Lower Monthly Mortgage Payments – A smaller loan means less interest paid over time.
✅ No Mortgage Insurance (at 20% Down) – Saving you thousands over the loan term.
✅ Better Mortgage Rates – Lenders offer lower rates to buyers with higher down payments.
✅ More Equity in Your Home – Helps if property values fluctuate.
5. How to Save for a Down Payment Faster
If saving up seems overwhelming, here are some strategies:
💰 Use the First-Time Home Buyer Incentive (FTHBI) – A government program that helps first-time buyers with an interest-free loan for a portion of the down payment.
🏦 Max Out Your RRSP (First-Time Home Buyer Plan – HBP) – Withdraw up to $60,000 tax-free from your RRSP for your down payment.
📉 Set Up a Dedicated Savings Plan – Automate a portion of your income to go directly into a high-interest savings account.
🏠 Consider a Joint Purchase – Buying with a partner or family member can help you reach the down payment goal faster.
Conclusion: What’s the Right Down Payment for You?
The ideal down payment depends on your financial situation and long-term goals. If you can afford 20% or more, you’ll save money on mortgage insurance and enjoy lower payments. But if you’re eager to get into the market, a 5% to 10% down payment can still get you into a home sooner.
🚀 Thinking of buying a home in Scarborough, Markham, or Richmond Hill? Let’s chat! We can help you understand your options, connect you with mortgage professionals, and guide you through the home-buying process.
📞 Contact us today to start your home search!
