Homes under $500,000 need 5% down. Between $500,000 and $1.5 million, you need 5% on the first $500,000 plus 10% on the rest, which is now insurable thanks to a December 2024 rule change. Cross $1.5 million, and mortgage insurance disappears entirely: you need a flat 20% down, no exceptions. On a $1.5 million home that's about $125,000. One dollar over, at $1,500,001, it's $300,000. That's the cliff.
Toronto buyers ask me some version of this question almost every week: "How much do I actually need to put down?" Most expect a straightforward percentage. What they get instead is a tiered formula with a hard wall built into it, and that wall sits right in the middle of the price range where a lot of GTA detached homes and north Toronto properties actually trade.
I want to walk you through exactly how this works, with real numbers, so you know precisely where you stand before you write an offer.
In Canada, whether you can buy with less than 20% down comes down to one thing: can the mortgage be insured. Mortgage default insurance, the kind CMHC and its competitors provide, protects the lender if you default. It's what allows lenders to accept a smaller down payment in the first place.
As of December 15, 2024, the federal government raised the price ceiling for insured mortgages from $1 million to $1.5 million. That single change reshaped the math for anyone buying in this range:
That last point is the one buyers miss. It's not that the percentage creeps up gradually as prices rise. It jumps, all at once, the moment you cross $1.5 million.
I ran the math myself rather than relying on a single calculator, and the tiered formula holds up cleanly. Here's what it looks like at different price points:
Look closely at those last two lines. One dollar of purchase price separates a buyer who needs about $125,000 down from a buyer who needs $300,000 down. That's a $175,000 swing triggered by a single dollar.
This isn't an abstract exercise for GTA buyers. The average detached home in Toronto is running about $1.36 million right now, and the Annex sits close behind at roughly $1.33 million. Lawrence Park North and Lawrence Park South average nearly $2 million and $2.6 million respectively, both firmly on the uninsured side of the line. If you're shopping detached properties in Toronto's core or north end, you are almost certainly transacting somewhere near this threshold, whether you've priced it out yet or not.
There's also a real cost to what happens when a deal gets pushed past the appraised value near this range. CBC reported on an Ontario buyer whose accepted offer of $1.959 million ran into trouble at financing when the appraisal came in roughly $300,000 lower than the agreed price, a reminder that the math on a high-value purchase needs to hold up at every step, not just at the offer stage.
A few practical takeaways follow directly from this.
Pricing psychology is real, and it works both ways. You'll notice a lot of GTA listings priced at $1,499,000 rather than $1,500,000 or higher. That's not an accident. Sellers and their agents know that pricing just under the line keeps the buyer pool wider, since more buyers qualify for insured financing below it. If you're a seller weighing where to set your ask near this threshold, that's worth understanding before you list. If you're bidding in a competitive situation, know that pushing your offer even slightly over $1.5 million doesn't just cost you more in price, it can change your entire financing structure.
Uninsured mortgages tend to carry higher rates. Because lenders can't transfer the default risk to an insurer above $1.5 million, they typically price that risk into a higher interest rate on the conventional mortgage. Budget for that difference when you're comparing carrying costs on a $1.4 million home versus a $1.6 million home, the price gap and the rate gap both work against you.
Run your specific numbers before you fall in love with a listing. The 5%/10%/20% tiers are the rule, but your actual required down payment also depends on your lender, your income, your existing debt, and whether you're buying resale or new construction. If you're weighing new-build financing, it's also worth checking whether the property qualifies for Ontario's HST rebate on new homes, which changes the net cost picture for buyers near this range considerably.
This is one piece of a larger closing cost picture. Down payment is the number buyers focus on first, but it's not the only number. Land transfer tax, legal fees, and title costs all stack on top of it, and the total gets meaningfully higher the closer you get to and past $1.5 million.
If you're deciding whether now is even the right window to be shopping in this range, it's worth looking at where GTA pricing sits below the $1 million mark for contrast, and whether 2026 is shaping up as a buyer's year before you commit to a price bracket.
Every buyer's situation is different, and the only way to know your real number, not the textbook number, is to run it against your actual pre-approval. That's exactly the conversation I have with clients before they ever put in an offer near this threshold.
Yes. As of December 15, 2024, mortgage default insurance is available on homes priced up to $1.5 million, using the tiered 5%/10% down payment structure. At $1.5 million or above, insurance is not available at any down payment amount, and a minimum 20% down payment is required.
At exactly $1,500,000, you're still within the insurable range, so the tiered formula applies and your minimum down payment is about $125,000. The moment the price goes even one dollar higher, you move into uninsured territory and the minimum jumps to 20%.
Often, yes. Because the lender can't transfer default risk to an insurer, uninsured mortgages typically carry a higher interest rate than insured ones. You'll want to compare rate quotes on both sides of the threshold with your lender before deciding how to structure an offer.
Not through mortgage insurance, no. Some buyers use strategies like a larger initial deposit, a co-signer, or bridge financing tied to the sale of an existing property to reach the 20% threshold, but the underlying rule doesn't change. Every situation is different, and this is where working through your specific numbers with someone who knows the local market matters.
Lender requirements vary, but buyers in this range are typically looking at household incomes well above $200,000, depending on your down payment size, existing debt, and the mortgage stress test rate at the time you apply. Your specific qualifying number depends on your full financial picture, so it's worth running against your actual pre-approval rather than a general estimate.
This isn't tax or legal advice. Mortgage insurance eligibility, lender-specific requirements, and closing costs vary by situation, so confirm the exact numbers for your purchase with your mortgage professional and real estate lawyer before you make an offer.
If you're weighing a purchase anywhere near this threshold, I'm happy to walk you through the numbers for your specific price point. Reach out anytime at ryan@cooncet.ca, or send your details through this form and we'll get back to you.
About Ryan Coyle
Ryan Coyle is a Toronto real estate broker and investor with more than 20 years in the industry and over $2 billion in real estate transactions. He personally holds a portfolio of 40+ doors and helps buyers, sellers, and investors build long-term wealth through Toronto real estate. Ryan leads Connect, a full-service GTA brokerage focused on the downtown core and north Toronto's luxury market. Learn more at connect.ca.
