Buyers · Financing How to Buy a Markham Home With a Lower Down Payment: Insured Mortgages, CMHC Costs and Budget Trade Offs
How to Buy a Markham Home With a Lower Down Payment: Insured Mortgages, CMHC Costs and Budget Trade Offs
You do not always need 20 percent down. But a smaller down payment comes with real costs. Here is how to weigh them.
Neeraj Moolchandani is a top real estate agent in Markham, Ontario.
The Short Answer
In Canada you can buy a home under $1.5 million with as little as 5 percent of the first $500,000 and 10 percent of the rest, using an insured mortgage. The cost is a mortgage insurance premium, added to your loan, of 4.00 percent with less than 10 percent down, 3.10 percent with 10 to 14.99 percent down, and 2.80 percent with 15 to 19.99 percent down, based on CMHC rates. In Ontario, 8 percent provincial sales tax on the premium must be paid in cash at closing. A 30 year amortization adds 0.20 percent. Homes at $1.5 million or more need 20 percent down.
Neeraj and the Kaizen Real Estate Team, one of the teams Markham first time and move up buyers trust, help many clients decide how much to put down. There is no single right answer, only clear trade offs.
Minimum Down Payments
- 5 percent of the first $500,000 of the price
- 10 percent of the portion from $500,000 to $1.5 million
- 20 percent for homes priced at $1.5 million or more, which cannot be insured
CMHC Premium Rates
| Down Payment | Loan to Value | Premium on the Loan |
|---|---|---|
| 5% to 9.99% | 90.01% to 95% | 4.00% |
| 10% to 14.99% | 85.01% to 90% | 3.10% |
| 15% to 19.99% | 80.01% to 85% | 2.80% |
| 20% or more | 80% or less | No insurance required on most purchases |
Source: CMHC homeowner premium rates. A 0.20 percent surcharge applies to amortizations over 25 years. Ontario charges 8 percent provincial sales tax on the premium, which cannot be added to the mortgage and is paid at closing. Other insurers have similar rates.
Weighing a smaller down payment against a bigger one? Neeraj can connect you with a mortgage professional to run both. Call or text Neeraj at (647) 370 8885.
Example: a $750,000 Condo Townhouse
In September 2026, the median Markham condo townhouse sold for $735,000, according to TRREB. Here is what different down payments look like on a $750,000 purchase.
| Down Payment | Mortgage | Premium | Premium Added to Loan | Ontario Tax Paid at Closing |
|---|---|---|---|---|
| $50,000 (minimum) | $700,000 | 4.00% | $28,000 | $2,240 |
| $75,000 (10%) | $675,000 | 3.10% | $20,925 | $1,674 |
| $112,500 (15%) | $637,500 | 2.80% | $17,850 | $1,428 |
| $150,000 (20%) | $600,000 | None | $0 | $0 |
Illustrative only, based on a 25 year amortization. Your lender will confirm exact figures. Land transfer tax and other closing costs are extra.
The Trade Offs
A lower down payment can make sense if
- Waiting to save more would take years while prices and rents keep moving
- You want to keep an emergency fund instead of spending every dollar
- You qualify comfortably for the monthly payment
A bigger down payment can make sense if
- You want a lower monthly payment and less total interest
- You want to avoid the premium and the tax on it
- You are close to a lower premium tier, such as 10 or 15 percent
Insured mortgages often come with competitive rates, so the full picture depends on the rate you are offered. Ask your mortgage professional to compare both options.
Want to see what a lower down payment buys in Markham today? Call or text Neeraj at (647) 370 8885.
Ways to Build Your Down Payment
- FHSA. Up to $8,000 a year, to $40,000 lifetime, for first time buyers.
- RRSP Home Buyers' Plan. Up to $60,000 per person, repaid over time.
- Gifts from family. Lenders usually need a signed gift letter.
Read our first time buyer's guide for details, and see what each budget buys.
Smart financing starts with clear numbers. Reach out anytime. Call or text Neeraj at (647) 370 8885.
Lower Down Payment Questions, Answered
How much does CMHC insurance cost?
CMHC premiums are 4.00 percent of the loan with less than 10 percent down, 3.10 percent with 10 to 14.99 percent down, and 2.80 percent with 15 to 19.99 percent down. A 0.20 percent surcharge applies to amortizations over 25 years.
Do I pay tax on mortgage insurance in Ontario?
Yes. Ontario charges 8 percent provincial sales tax on the mortgage insurance premium. It cannot be added to the mortgage and is paid at closing.
What is the minimum down payment in Markham?
The minimum is 5 percent of the first $500,000 and 10 percent of the portion up to $1.5 million. Homes at $1.5 million or more need at least 20 percent down.
Can I get a 30 year mortgage with less than 20 percent down?
First time buyers and buyers of new builds can choose a 30 year amortization on an insured mortgage, with a 0.20 percent premium surcharge.
Is it better to put 20 percent down?
Not always. A larger down payment avoids the premium and lowers your payment, but keeping savings for emergencies or buying sooner can matter more. Compare both with your mortgage professional.
The Right Down Payment for Your Life
Neeraj will help you see what each option means for your search, your payment, and your plans.
Call or text (647) 370 8885 · info@kaizenrealestate.ca
Kaizen Real Estate Team, eXp Realty, Brokerage · 9763 Markham Rd, Markham, ON L6E 1A4
Premium rates: CMHC. Mortgage rules: 2026 federal rules. Market statistics: TRREB Market Watch, Markham, September 2026. Confirm with your lender. This article is general information, not legal, tax, mortgage, or financial advice. Market commentary describes current conditions and is not a promise of future prices. Information is believed accurate but should be independently verified. Not intended to solicit properties currently under contract.
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