7 Canadian cities where a 20% down payment is under $200K

As the buyer’s market continues in many Ontario cities, people may consider purchasing a home for the first time.

But if there’s one number every new homebuyer should know, it’s 20 per cent, according to a new report from real estate platform Zoocasa.

Federal mortgage rules allow homes priced up to $1.5 million to be purchased with as little as five per cent down on the first $500,000, and 10 per cent on the remaining balance through Canadian Mortgage and Housing Corporation insurance.

Hitting the 20 per cent threshold for a down payment means avoiding Canadian Mortgage and Housing Corporation insurance premiums, which can add up to tens of thousands of dollars over the years, Zoocasa said.

So where can you find a home with a down payment that won’t break the budget?

Zoocasa found seven large Canadian cities where buyers could purchase a single detached home with a down payment under $200,000 right now.

Here’s Zoocasa’s list of seven cities and the amount needed for a 20 per cent down payment (on an average home):

• Winnipeg: $95,463
• Edmonton: $120,949
• Montreal: $129,000
• Ottawa: $144,254
• Calgary: $149,560
• Hamilton: $172,181
• Mississauga: $194,209

Comparatively, buyers in Toronto ($322,198) and Vancouver ($369,580) face a 20 per cent down payment threshold that can take decades to save for at the average household income.

Of course, buyers also need to budget for monthly mortgage payments.

If you’re looking to buy a home in one of Canada’s biggest cities but are hoping for a monthly mortgage payment of $3,000 or under, there are options, Zoocasa said.

Winnipeg stays under $3,000 in every scenario, including with just $50,000 down at $2,257 per month. Edmonton gets under $3,000 with $100,000 down ($2,666 per month), and even $50,000 down comes in just below the line at $2,930. Montreal crosses the threshold with $100,000 down ($2,879 per month), while $50,000 down leaves buyers just over, at $3,143.

Ottawa needs $200,000 down to reach $2,753 per month; at $150,000, payments are still $3,017 per month. Calgary shows a similar pattern: $200,000 down brings payments to $2,894 per month, while $150,000 down brings payments to $3,158 per month.

Hamilton requires $300,000 down to bring the average payment to $2,963 per month.

Mississauga, Brampton, Toronto, and Vancouver never fall below $3,000 per month in any scenario modelled. Even with $300,000 down, Mississauga’s average payment is $3,545, Brampton’s is $3,820, and Toronto and Vancouver are nowhere near the $3,000 mark, according to Zoocasa.

How far a $200,000-$300,000 down payment goes in Canada’s largest cities by population:

Chart: Zoocasa

“None of this means homeownership is impossible,” Zoocasa said in the report. “But it does mean that for most Canadians, getting there requires a clear‑eyed look at what their savings can actually accomplish, in which city, and under which conditions.”

See the full report here.

Lead photo: Kindel Media