How Much Down Payment Do You Need to Buy a Home in Milton in 2025? (Updated Rules!)
New Down Payment Rules in Canada – What Buyers in Milton Need to Know
As of December 15, 2024, the Canadian government has increased the insured mortgage limit from $1 million to $1.5 million. This means that buyers no longer need a full 20% down payment for homes under $1.5M—a major win for homebuyers in Milton’s competitive real estate market.
If you’re planning to buy a home in Milton in 2025, this guide will help you understand:
✔️ The new minimum down payment requirements
✔️ How much you need to save based on Milton’s home prices
✔️ Ways to lower your upfront costs and mortgage payments
✔️ Government programs that can help you buy your first home
Let’s break it all down so you know exactly how much you need for a down payment in Milton.
1. How Much Down Payment Do You Need in Milton? (Updated 2025 Rules)
Under the new mortgage rules, the minimum down payment required depends on the purchase price of the home:
| Purchase Price | Minimum Down Payment Required |
|---|---|
| $500,000 or less | 5% of the purchase price |
| $500,001 – $1,499,999 | 5% on the first $500K + 10% on the remaining amount |
| $1,500,000 or more | 20% of the purchase price |
📌 Example Calculation:
If you’re purchasing a $1,400,000 home in Milton, your minimum down payment would be:
- First $500,000 at 5%:
- $500,000 × 0.05 = $25,000
- Remaining $900,000 at 10%:
- $900,000 × 0.10 = $90,000
Total Minimum Down Payment: $115,000
✅ Before this rule change, you would have needed a 20% down payment ($280,000). The new rule saves buyers $165,000 upfront!
2. Should You Aim for a Bigger Down Payment?
While 5-10% is the minimum, putting down 20% or more has big advantages:
✅ Lower mortgage payments – You borrow less money.
✅ No CMHC mortgage insurance – Saves you thousands.
✅ Better interest rates & mortgage terms – Lenders prefer lower-risk borrowers.
📌 Key Takeaway: If possible, aim for a 20% down payment to avoid extra costs and lower your monthly payments.
3. CMHC Mortgage Insurance – The Extra Cost If You Put Down Less Than 20%
If your down payment is less than 20%, you must pay mortgage insurance from CMHC (Canada Mortgage and Housing Corporation).
| Down Payment | CMHC Insurance Premium |
|---|---|
| 5% – 9.99% | 4.0% of the mortgage amount |
| 10% – 14.99% | 3.1% of the mortgage amount |
| 15% – 19.99% | 2.8% of the mortgage amount |
📌 Example Calculation:
For a $1,200,000 home with 10% down ($120,000):
- Mortgage amount: $1,080,000
- CMHC Premium (3.1%): $33,480 (added to your mortgage)
✅ A 20% down payment eliminates this extra cost!
4. First-Time Buyer Programs to Help with Your Down Payment
Buying your first home? These government programs can help:
✔️ First-Time Home Buyer Incentive
- The government lends 5% (resale homes) or 10% (new builds) toward your down payment.
- You repay the loan when you sell or after 25 years.
✔️ RRSP Home Buyer’s Plan
- Borrow up to $60,000 from your RRSP tax-free for your down payment.
- Pay it back within 15 years.
✔️ Tax-Free First Home Savings Account (FHSA)
- Save up to $8,000 per year (up to $40,000 total) tax-free to use for a down payment.
✔️ First-Time Buyer Land Transfer Tax Rebate
- Save up to $4,000 on land transfer tax in Ontario.
📌 Key Takeaway: Using these programs can reduce the cash you need upfront and make homeownership more affordable.
5. How Much Do You Need to Buy in Milton?
Here’s a breakdown of minimum vs. recommended down payments for different home types in Milton:
| Home Price | Minimum Down Payment | Recommended Down Payment (20%) |
|---|---|---|
| $600,000 (condo) | $30,000 | $120,000 |
| $900,000 (townhouse) | $65,000 | $180,000 |
| $1,200,000 (detached home) | $95,000 | $240,000 |
| $1,400,000 (luxury home) | $115,000 | $280,000 |
📌 Final Tip: If possible, aim for at least 10-20% down to reduce your mortgage payments and long-term costs.
📞 Need help planning your home purchase? Let’s chat! Book a call today, and let’s build a plan that works for you!
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