The minimum, 10% or 20% down?
Three neighbours buy the same home and put down different amounts. See what each pays, including the mortgage insurance fee, what each ends up with, and the investment return that would change the answer.
Meet the neighbours: same home, same street, different down payments.
- Mia the Minimalistputs down the minimum: $55,000. Keeps as much cash as the rules allow.
- Sam the Balancerputs down 10%: $80,000. Splits the difference.
- Alex the Conservativeputs down 20%: $160,000. Skips mortgage insurance entirely.
Alex the Conservative ends up $106,519 better off than Mia the Minimalist, because skipping mortgage insurance and borrowing less saves more than investing the extra cash earns.
All three pay exactly the same amount out of pocket over the years. What differs is how much goes to the bank as insurance and interest, and how much they keep.
| Miathe Minimalistputs down the minimum at 4.5% | Samthe Balancerputs down 10% at 4.5% | Alexthe Conservativeputs down 20% at 4.5%Ends up best off | |
|---|---|---|---|
| Moving dayWhat they hand over | $55,000That’s 6.88% of the price. $105,000 stays in the bank and gets invested. | $80,000That’s 10% of the price. $80,000 stays in the bank and gets invested. | $160,000That’s 20% of the price. |
| The insurance feeA one-time charge | $31,290Added to the mortgage. Lenders require it when you put down less than 20%. | $23,760Added to the mortgage. Lenders require it when you put down less than 20%. | $0No fee at 20% down. |
| Every monthThe mortgage payment | $3,914The highest payment of the three. | $3,750$164 less than Mia pays, invested every month. | $3,227$687 less than Mia pays, invested every month. |
| 30 years laterHome paid off | $1,532,083The home ($1.08M) plus investments of $454k. | $1,557,774The home ($1.08M) plus investments of $479k. | $1,638,602The home ($1.08M) plus investments of $560k. |
What would change the answer?
Everything above hangs on one guess: what the money they keep earns each year. Here’s the return where each neighbour ends up exactly even with Alex. Above it, putting less down wins. Below it, Alex does.
Mia vs Alex · the minimum vs 20% down
7.06%a year
Mia only comes out ahead of Alex if the money Mia keeps earns more than 7.06% a year.
At your 5%, Alex is ahead. Returns would need to rise 2.06 points for Mia to win.
Sam vs Alex · 10% vs 20% down
7.05%a year
Sam only comes out ahead of Alex if the money Sam keeps earns more than 7.05% a year.
At your 5%, Alex is ahead. Returns would need to rise 2.05 points for Sam to win.
Why it flips: putting less down leaves more cash to invest, but it also means a bigger mortgage plus the insurance fee ($31,290 for Mia), all charged interest at 4.5%. Less down only wins when what they invest earns enough to outrun that extra cost. These returns are before tax and fees and assumed steady every year, which real markets aren’t.
See every number
The full comparison
| Figure | Minimum down4.5% | 10% down4.5% | 20% down4.5%Highest net worth |
|---|---|---|---|
| At purchase | |||
| Down payment | $55,000.006.88% | $80,000.0010% | $160,000.0020% |
| Loan-to-value | 93.13% | 90.00% | 80.00% |
| CMHC premium | $31,290.004.2% | $23,760.003.3% | Not required |
| Total mortgage | $776,290.00 | $743,760.00 | $640,000.00 |
| Over 30 years | |||
| Monthly payment | $3,914.17 | $3,750.15 | $3,226.98 |
| Total paid | $1,409,102.98 | $1,350,055.30 | $1,161,712.64 |
| Total interest | $632,812.98 | $606,295.30 | $521,712.64 |
| Cost of borrowing (interest + premium) | $664,102.98 | $630,055.30 | $521,712.64 |
| Invested | |||
| Lump sum at purchase | $105,000.00 | $80,000.00 | $0.00 |
| Monthly deposit | $0.00 | $164.02 | $687.20 |
| Portfolio at year 30 | $453,803.95 | $479,494.42 | $560,322.56 |
| At year 30 | |||
| House value | $1,078,279.13 | $1,078,279.13 | $1,078,279.13 |
| Net worth | $1,532,083.08 | $1,557,773.55 | $1,638,601.69 |
Net worth is the house value plus the portfolio; the mortgage is paid off by then. Amounts are rounded to the cent; differences are worked out before rounding.
Deciding how much to put down? We’ll look at your cash, your rate options and what you plan to do with the difference.
Book a strategy callEstimates for illustration only, based on the figures you entered. Not a mortgage approval, pre-approval or offer, and not investment advice. CMHC premiums, eligibility and lender terms vary; confirm them with your lender. Gaurav Sophat · Mortgage Agent Level 2 · DLC FC Funding #10671.
What is this based on?
All calculations happen in your browser. Your figures are not collected or saved.
Mia, Sam and Alex are illustrations: the same home, three down payments. The Minimum and 10% options share the rate you enter for less than 20% down. The minimum down payment follows the federal rule: 5% of the first $500,000, 10% of the portion from $500,000 to $1.5 million, and 20% at $1.5 million or more. The CMHC premium is charged on the loan and added to the mortgage: 2.80% above 80% loan-to-value, 3.10% above 85%, 4.00% above 90%, plus 0.20% when the 30-year surcharge is on.
- Monthly rate
- (1 + rate ÷ 2)^(1/6) − 1
- Lump sum invested
- 20% down payment − this option’s down payment
- Monthly deposit
- Highest monthly payment − this option’s payment
- Investment return
- What you enter (5% by default), compounded monthly; 0% when the savings sit as cash
- House appreciation
- 1% a year
- Net worth
- House value + portfolio
- Break-even return
- The return where an option’s net worth equals 20% down’s
Not included: property tax, closing costs, land transfer tax, provincial sales tax on the premium (charged in Ontario, Quebec and Saskatchewan and not added to the loan), investment taxes and fees, and rate changes at renewal.
Financial Consumer Agency of Canada: down paymentCMHC: mortgage loan insurance cost