Putting down the minimum five per cent on a $500,000 home gets you into the housing market for a reasonable $25,000. Saving up a 20 per cent down payment, on the other hand, avoids costly mortgage default insurance premiums (mortgage loan insurance from Canada Mortgage and Housing Corporation). Home buyers need to put down 20 per cent on homes valued at $1 million or more. Putting down less than 20 per cent requires the buyer to purchase mortgage loan insurance to protect the lender against default. Buyers with 20 per cent down also avoid the federal mortgage stress tests if they use a credit union or alternative lender.

Source: thestar October 20, 2019 22:30 UTC