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What default insurance costs when you're putting down less than 20% — and the part of it you have to pay in cash.
Insurance premium
$29,600
$2,368of this can't go on the mortgage. Ontario charges sales tax on the premium, and unlike the premium itself it has to be paid in cash on closing — alongside your land transfer tax and legal fees.
It's 5% on the first $500,000, then 10% on everything above that, up to $1,500,000. So an $800,000 home needs $55,000 down, not $40,000 — a $15,000 gap that has caught out a lot of buyers who budgeted from the headline number. Above $1,500,000, insurance isn't available at all and you need a full 20%.
That surprises people. The premium buys the lender protection against your default — what it buys youis access to a mortgage with less than 20% down, often at a better rate than an uninsured one. Whether it's worth waiting to save 20% instead depends on what prices and rates do while you save, which is a real conversation rather than a calculation.
An estimate, not advice
These figures are calculated from published government and insurer rules and are for general guidance only. They are not a mortgage approval, a quote, or legal, tax or financial advice. Lenders apply their own qualifying policies, and your own circumstances will change the result — confirm anything you plan to rely on with your mortgage professional and your real estate lawyer before you commit to a purchase or a sale. Rates, tax brackets and insurance premiums change without notice.
Statutory figures current as of . Questions about your own numbers? Ask me directly or call 416-998-1882.
