Second Home Down Payment in Canada: Minimum and Mortgage Rules

Buying a second property in Canada requires you to meet the country’s down payment rules—just like first-time buyers. The exact minimum you’ll need depends on several factors, including the purchase price, how many units the property has, and whether you plan to live in the property or rent it out.

Down payment requirements in Canada

All Canadian home buyers must provide a minimum down payment tied to the purchase price of the property. The standard rules for minimum down payments are:

Purchase price	Minimum down payment required
$500,000 or less	5% of the purchase price
$500,000 to $999,999	5% of the first $500,000 + 10% of the portion above $500,000
$1,000,000 or more	20% of the purchase price

If your home purchase is under $1 million and your down payment is less than 20%, you will generally need mortgage default insurance (also called mortgage loan insurance). This insurance protects the lender if you default on mortgage payments. Using a mortgage down payment calculator is the fastest way to estimate how much you’ll need to save.

Upcoming change to insured mortgage limits

Starting Dec. 15, 2024, the maximum value for an insured mortgage will increase from $1 million to $1.5 million. Under the new rules, buyers of homes up to $1.5 million can access insured mortgages, subject to revised down payment tiers: 5% on the first $500,000 and 10% on the portion between $500,000 and $1.5 million. Properties of $1.5 million or more will require a 20% down payment.

Minimum down payment for a second home in Canada

Contrary to common belief, second homes do not automatically require a 20% down payment. If the second property is owner-occupied—meaning you or an eligible family member will live in at least one of the units—the down payment rules are similar to those for single-property purchases.

For example, you can buy a second home with 5% down if the property is intended for family or personal use and the mortgage amount falls within the lower purchase-price bands. For buildings with one or two units that are owner-occupied, the minimum down payment can be 5% (for homes under $500,000). For three- or four-unit owner-occupied properties, the minimum typically rises to 10%.

Buildings with five or more units are generally treated as commercial properties and require commercial financing, where lenders often expect down payments between 20% and 35%, depending on location and the borrower’s cash flow.

Number of units in second home	Owner-occupied?	Minimum down payment
1 or 2 units	Yes	5% of the purchase price (for homes under $500,000)
3 or 4 units	Yes	10% of the purchase price
5 or more units	N/A (commercial)	20% to 35% of the purchase price (varies by lender)

What qualifies as an owner-occupied property?

Lenders and mortgage insurers define owner-occupied differently, so you must confirm the specific criteria with your lender. A common definition requires at least one unit to be occupied rent-free by the borrower or by a close family member—for instance, a spouse, common-law partner, parent, or child. Some lenders may also expect you to designate the property as your principal residence for qualifying purposes. Confirming these details up front avoids potential conflicts with mortgage terms later on.

Minimum down payment for a rental (non-owner-occupied) property

If the second property will be rented out and no unit is owner-occupied, higher minimum down payments apply. Financing for rental properties tends to be more stringent, and buyers generally need at least a 20% down payment for one- to four-unit rental properties.

Number of units in second home	Owner-occupied?	Minimum down payment
1 or 2 units	No	20% of the purchase price
3 or 4 units	No	20% of the purchase price
5 or more units	N/A (commercial)	20% to 35% of the purchase price (varies by lender)

Mortgage default insurance for second homes

Mortgage default insurance rules differ for second properties. Canada Mortgage and Housing Corporation (CMHC), the public insurer, typically only provides insurance for one principal home per borrower at a time, which means CMHC will not insure a mortgage on a non-owner-occupied rental or an additional personal-use property if you already have an insured mortgage. However, private insurers in Canada do offer mortgage default insurance for second homes in certain cases, often permitting lower down payments (for example, 5%) if their eligibility criteria are met. Check with insurers and lenders to confirm which options apply to your situation.

How to finance a down payment on a second property

Unlike some first-home scenarios where lenders may require proof that a down payment is not borrowed, buyers commonly use financing sources to cover down payments on second properties. Typical options include refinancing your current mortgage, obtaining a home equity line of credit (HELOC), taking a second mortgage on your primary residence, or, for homeowners aged 55 and over, a reverse mortgage. Each option has different costs, tax implications and risk profiles, so discuss them with a mortgage broker or financial advisor to determine the best strategy for your circumstances.