Blog > How to Buy a Markham Home With a Lower Down Payment: Insured Mortgages, CMHC Costs and Budget Trade-Offs
How to Buy a Markham Home With a Lower Down Payment: Insured Mortgages, CMHC Costs and Budget Trade-Offs
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Michael John Lau is a top real estate agent in Markham and a REALTOR® with the Kaizen Real Estate Team, one of the most active real estate teams in Markham and York Region. He helps buyers compare a smaller down payment with a larger one, so the monthly payment and cash at closing both make sense.
How can you buy a Markham home with less than 20 percent down
Homes priced under $1.5 million can be bought with an insured mortgage and as little as 5% down on the first $500,000 and 10% on the rest. The trade-off is a CMHC insurance premium, from 2.80% to 4.00% of the mortgage, added to the loan, plus 8% Ontario PST on the premium, paid in cash at closing. On a $575,000 condo with the minimum $32,500 down, the premium is about $21,700 and the PST about $1,736. First-time buyers and buyers of new builds can choose a 30-year amortization for an extra 0.20% premium.
Minimum Down Payment by Price
| Purchase price | Minimum down payment |
|---|---|
| Up to $500,000 | 5% |
| $500,000 to under $1.5 million | 5% of the first $500,000 plus 10% of the rest |
| $1.5 million or more | 20%, no CMHC insurance |
The insured price cap rose from $1 million to $1.5 million on December 15, 2024, which brought many Markham townhomes and some detached homes into insured range.
CMHC Premiums
| Down payment | Premium on the mortgage |
|---|---|
| 5% to 9.99% | 4.00% |
| 10% to 14.99% | 3.10% |
| 15% to 19.99% | 2.80% |
| 20% or more | No insurance needed |
The premium is added to the mortgage. Ontario charges 8% PST on it, which must be paid in cash on closing.
Two Markham Examples
| $575,000 condo | Down payment | Premium | PST at closing | Payment, 4.34%, 25 years |
|---|---|---|---|---|
| Minimum | $32,500 | $21,700 | $1,736 | About $3,073 |
| 10% | $57,500 | $16,042 | $1,283 | About $2,906 |
| 20% | $115,000 | None | None | About $2,505 |
| $900,000 townhome | Down payment | Premium | PST at closing | Payment, 4.34%, 25 years |
|---|---|---|---|---|
| Minimum | $65,000 | $33,400 | $2,672 | About $4,729 |
| 10% | $90,000 | $25,110 | $2,009 | About $4,548 |
| 20% | $180,000 | None | None | About $3,921 |
Payments are estimates for comparison only.
Not sure how much to put down? Call Michael John Lau, REALTOR®, at (416) 700-0286.
The Trade-Offs
- Smaller down payment: buy sooner and keep savings for closing costs and emergencies, but pay a premium and a higher monthly payment.
- Larger down payment: no premium and a lower payment, but it can take years longer to save while prices and rates move.
- Insured rates: insured mortgages often get some of the lowest rates, which can narrow the cost gap.
- Qualifying: insured buyers must still pass the stress test, and housing costs must stay within debt service limits.
30-Year Amortization for First-Time Buyers
First-time buyers and buyers of newly built homes can choose a 30-year amortization on an insured mortgage. It lowers the monthly payment but adds 0.20% to the premium and more interest over time. On the $900,000 example with the minimum down, the payment drops from about $4,729 to about $4,298 at the same rate, before the small premium increase.
Cash You Still Need at Closing
A smaller down payment does not reduce every cost. You still need cash for the PST on the CMHC premium, land transfer tax, legal fees and adjustments. On a $575,000 Markham condo, Ontario land transfer tax is about $7,975 before any first-time buyer refund of up to $4,000. Plan for these on top of the down payment.
Ways to Build the Down Payment
The First Home Savings Account and RRSP Home Buyers’ Plan can help first-time buyers, and family gifts are common. Lenders will want a clear paper trail for every dollar. See using the FHSA and Home Buyers’ Plan. Ultimately, the decision is yours. The goal is to make sure you have all the information before you choose your down payment.
Next Steps
- Mortgage calculator: compare down payment options.
- First-time buyer services: plan your first purchase.
- Condos in Markham: see what fits a smaller down payment.
Frequently Asked Questions
What is the minimum down payment for a home in Markham?
Under $1.5 million: 5% of the first $500,000 and 10% of the rest. At $1.5 million or more: 20%.
How much is CMHC insurance?
From 2.80% to 4.00% of the mortgage, depending on your down payment, added to the loan.
Do I pay tax on CMHC insurance in Ontario?
Yes. Ontario charges 8% PST on the premium, paid in cash at closing.
Can I get a 30-year mortgage with less than 20% down?
First-time buyers and buyers of new builds can, with an extra 0.20% premium.
Is it better to wait until I have 20% down?
Not always. Compare the premium and higher payment with the cost of waiting, including rent and price changes.
What is the highest price I can buy with an insured mortgage?
Under $1.5 million, since December 15, 2024.
Work With Michael John Lau in Markham
Michael John Lau helps Markham buyers compare down payment options with real numbers, so the purchase fits both the budget today and the plan for the future.
📞 Contact Michael John Lau, REALTOR®
🌐 www.callmikelau.com
Want to compare your options?
Michael John Lau can help you see what a smaller or larger down payment means for the homes you like.
Michael John Lau, REALTOR® · Markham, Ontario · (416) 700-0286
Disclaimer. Michael John Lau is a licensed REALTOR® serving buyers and sellers in Markham, Ontario and the Greater Toronto Area. CMHC premiums, the 30-year surcharge, Ontario PST and the $1.5 million cap are as summarized by Canadian Money Help (May 19, 2026); confirm with CMHC or your lender. The 4.34% rate is as reported by Ratehub (October 28, 2026). Payments are estimates using semi-annual compounding. Michael John Lau is not a lawyer, accountant, tax advisor or mortgage professional. This article is general information, not legal, tax or financial advice. Speak with a qualified professional about your own situation.