Understanding the latest mortgage rules can help you plan your home purchase with confidence. In Canada, rules about down payments, mortgage insurance, amortization, and land transfer taxes affect how much you need to save and what incentives you might get. This guide breaks down the key 2024–2025 mortgage eligibility rules in simple terms so you know what to expect.

 

Minimum Down Payment Requirements in Canada

 

The required minimum down payment depends on your property’s purchase price. As of December 15, 2024, the federal government raised the price limit for insured mortgages from $1 million to $1.5 million . This change allows buyers in high-price markets to make smaller down payments on homes up to $1.5 million. The general down payment rules by price are:

 

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• Home price $500,000 or less: 5% minimum down payment.

• Home price $500,001 to $1,499,999: 5% on the first $500k, 10% on the portion above $500k. (For example, a $800k home would require $25k for the first $500k and $30k for the remaining $300k, totalling $55k down.)

• Home price $1.5 million or more: 20% minimum down payment (no CMHC insurance is available above this price).

 

Note: Before 2024, homes $1 million+ did not qualify for CMHC insurance, effectively requiring 20% down. Now, insured mortgages are allowed for homes up to $1.5 million, using the 5%/10% tiered down payment structure on those amounts . Any home $1.5 million or above still needs at least 20% down because it won’t be eligible for mortgage default insurance.

 

Mortgage Insurance Rules and Premiums

 

If your down payment is under 20% (a high-ratio mortgage), you are required to get mortgage default insurance (often called CMHC insurance) . This insurance protects the lender in case you default, and it allows you to borrow with a smaller down payment. Key points about mortgage insurance in 2024–2025 include:

 

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• It’s mandatory for mortgages with <20% down on homes up to $1.5 million . (Homes over $1.5M can’t be insured, so 20% down or more is required.)

• The one-time insurance premium is added to your mortgage amount and paid over the life of the loan (you don’t pay it in cash upfront in most cases) . The premium is calculated as a percentage of your loan, based on your loan-to-value (LTV) ratio (i.e. how much you’re borrowing versus the home price).

• Premium rates: The smaller your down payment, the higher the premium percentage. For example: a 5% down payment (95% LTV) carries a ~4.0% insurance premium, whereas a 15% down (85% LTV) has about a 2.8% premium . In general:

 

• 5–9.99% down (90.01–95% LTV) → 4.00% premium 

• 10–14.99% down (85.01–90% LTV) → 3.10% premium 

• 15–19.99% down (80.01–85% LTV) → 2.80% premium 

• (With 20% or more down, no insurance is needed, so no premium.)

 

These premium rates apply to standard residential mortgages. Note that if your down payment is from a non-traditional source (such as borrowed funds), the premium may be slightly higher (e.g. 4.5% instead of 4.0% for 95% LTV).

 

Maximum Amortization Periods (Insured vs. Uninsured)

 

The amortization period is the length of time over which your mortgage is scheduled to be paid off. Different rules apply depending on whether your mortgage is insured (high-ratio) or not:

 

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• Insured mortgages (down payment < 20%) – The maximum amortization is 25 years in most cases . However, a new federal policy effective late 2024 allows up to 30-year amortizations for insured loans if you are a first-time homebuyer or you’re buying a newly constructed home  . (This is meant to help first-time buyers by reducing monthly payments, though it means paying more interest overall.)

• Uninsured mortgages (down payment ≥ 20%) – These conventional mortgages are not subject to the 25-year limit. Most lenders offer up to 30-year amortizations on uninsured mortgages . In some cases, extended amortizations (e.g. 35 years) might be available through certain lenders, but 30 years is the common maximum with mainstream banks. Longer amortizations lower your monthly payment but increase total interest paid.

 

Ontario Provincial Land Transfer Tax (LTT) Rates

 

When you buy property in Ontario, you pay a provincial Land Transfer Tax on the purchase. The tax is charged on a sliding scale with brackets, meaning different portions of the price are taxed at different rates. For residential homes in Ontario, the provincial LTT rates are:

 

• 0.5% on the portion of the purchase price up to $55,000 

• 1.0% on the portion from $55,001 up to $250,000 

• 1.5% on the portion from $250,001 up to $400,000 

• 2.0% on the portion from $400,001 up to $2,000,000 

• 2.5% on any amount above $2,000,000 (for properties with one or two single-family residences) 

 

For example, if you bought a $500,000 home in Ontario, your provincial LTT would be about $6,475. (First $55k ×0.5% + next $195k ×1.0% + next $150k ×1.5% + remaining $100k ×2.0%). Ontario’s LTT applies everywhere in the province. If you buy in the City of Toronto, you also pay a municipal LTT on top of the provincial tax.

 

Toronto Municipal Land Transfer Tax (MLTT) Rates

 

On Toronto real estate purchases, the municipal land transfer tax is charged in addition to the Ontario LTT. Toronto’s MLTT has a similar tiered rate structure, with recent changes adding higher brackets for luxury properties (as of January 1, 2024)  . The Toronto LTT rates for one-to-two family homes are:

 

• 0.5% on the first $55,000 

• 1.0% on $55,001 to $250,000 

• 1.5% on $250,001 to $400,000 

• 2.0% on $400,001 to $2,000,000 

• 2.5% on $2,000,001 to $3,000,000 

• 3.5% on $3,000,001 to $4,000,000 

• 4.5% on $4,000,001 to $5,000,000 

• 5.5% on $5,000,001 to $10,000,000 

• 6.5% on $10,000,001 to $20,000,000 

• 7.5% on any amount over $20,000,000 

 

In practical terms, for most home buyers in Toronto, you’ll pay 2.0% on the portion of the price above $400k (mirroring the provincial tax), plus higher rates if your purchase price exceeds $2 million. These higher brackets primarily affect luxury real estate transactions. Always remember that Toronto buyers pay both the Ontario LTT and the Toronto MLTT, so the total land transfer tax bill will be roughly double the provincial amount for an average home purchase in the city  .

 

First-Time Homebuyer Land Transfer Tax Rebates (Ontario & Toronto)

 

Both Ontario and Toronto offer rebate programs for first-time homebuyers to help offset land transfer taxes:

 

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• Ontario First-Time Homebuyer Rebate: A refund of up to $4,000 on the provincial LTT . This amount is equal to the full Ontario LTT on a home priced up to about $368,000 . If your home costs more, you still get the $4,000 maximum off your Ontario tax bill.

• Toronto First-Time Buyer Rebate: A refund of up to $4,475 on the municipal LTT . This covers the full Toronto tax on a $400,000 home, and is the maximum rebate no matter how high the price . First-time buyers purchasing in Toronto can qualify for both the $4,000 (Ontario) and $4,475 (Toronto) rebates, significantly reducing the total land transfer taxes due.

• Eligibility: To qualify as a first-time homebuyer for these rebates, you (and your spouse) must never have owned a home anywhere in the world . You must be at least 18 years old and a Canadian citizen or permanent resident . The home must be your principal residence (you need to move in within 9 months of purchase) . First-time buyer refunds are typically claimed at the time of closing, so they directly reduce the tax you pay. (Note: If you forget to claim at closing, you can apply for the refund within 18 months after purchase).

 

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Bottom Line: These updated mortgage rules and tax details aim to make homeownership more accessible, especially for first-time buyers. Knowing the minimum down payment required, whether you need insurance, your maximum amortization, and the taxes (and rebates) due at closing will help you budget and prepare for a home purchase in 2024–2025. Always check for the most current regulations or speak with a mortgage professional, as rules can change and individual circumstances may vary  .