Understanding Minimum Down Payments for Home Purchases

Minimum Down payment required

Purchasing a home is a significant milestone in anyone’s life, and it comes with its set of questions and considerations. One of the most common inquiries we receive as mortgage brokers in North Vancouver is about the minimum down payment required for buying a home. This blog post aims to provide a clear, concise, and authoritative answer to help potential homebuyers understand their financial commitments.

What is Down Payment?

A down payment is the initial, upfront payment made when buying a home. It’s a percentage of the home’s purchase price and is paid out of the buyer’s pocket, as opposed to the portion that is financed through a mortgage.

Minimum Down Payment in North Vancouver & Across Canada

The minimum down payment required for purchasing a home in Canada, including North Vancouver, depends on the purchase price of the home:

  • For homes priced at $500,000 or less, the minimum down payment is 5% of the purchase price.
  • For homes priced between $500,000 and $999,999, the minimum down payment is 5% of the first $500,000 of the purchase price, plus 10% of the portion of the purchase price above $500,000.
  • For homes priced at $1 million or more, the minimum down payment is 20% of the purchase price.
  • **Any rental property, regardles of price requires a minimum of 20% down**

Examples of Minimum Down Payments

To make this clearer, let’s look at a couple of examples:

  1. For a home priced at $400,000: The minimum down payment required would be 5% of $400,000, which equals $20,000.
  2. For a home priced at $750,000: The minimum down payment required would be 5% of the first $500,000 ($25,000) plus 10% of the remaining $250,000 ($25,000), totaling $50,000.
  3. For a home priced at $1.5 million: The minimum down payment required would be 20% of $1.5 million, which equals $300,000.

Why is a Down Payment Important?

A down payment affects your mortgage in several ways:

  • Mortgage Size: A larger down payment reduces the amount you need to borrow, leading to lower monthly mortgage payments.
  • Mortgage Insurance: If your down payment is less than 20% of the purchase price, you’ll need to get mortgage loan insurance, which protects the lender in case of default. This insurance adds to the cost of your mortgage.
  • Interest Costs: A smaller mortgage means you’ll pay less interest over the life of the loan, saving you money in the long run.


Understanding the minimum down payment requirements is crucial for anyone looking to purchase a home in North Vancouver. It not only helps in planning your finances but also in making informed decisions about your potential investment. As mortgage brokers, we’re here to guide you through every step of your home buying journey, ensuring you have all the information you need to make the best choices for your future.

For more detailed information tailored to your specific situation, feel free to contact us at Brent Shepheard – Mortgage Broker, North Vancouver. Our team is dedicated to helping you navigate the complexities of mortgage financing, making your home buying experience as smooth and successful as possible.