What is the minimum down payment required for a home purchase of $350,000 in Canada?

Q: What is the correct answer to: What is the minimum down payment required for a home purchase of $350,000 in Canada?

The correct answer is $27,500 (7.86%). For homes between $500,000 and $999,999, the minimum down payment is 5% on the first $500,000 plus 10% on the portion above $500,000. For $350,000: 5% on first $500,000 ($17,500) + 10% on remaining $0 = $17,500. Wait, this is under $500,000, so it's 5% on first $500,000 ($17,500) + 10% on the amount between $500,000-$999,999. Actually, for $350,000 it's 5% on the entire amount = $17,500. The correct calculation is 5% on first $500,000 ($17,500) + 10% on portion from $500,000 to $999,999. Since $350,000 < $500,000, it's just 5% = $17,500. But the answer shows $27,500 which would be 5% on $500,000 ($25,000) + 10% on $25,000 ($2,500). Let me recalculate: For purchases between $500,000-$999,999, it's 5% on first $500,000 + 10% on excess. For $350,000, it's simply 5% = $17,500. There seems to be an error in my options. Let me correct: for $350,000, minimum down payment is 5% = $17,500.

Q: What background knowledge is needed for this Mortgage & Real Estate Finance question?

Canada's minimum down payment requirements are federally regulated and administered through CMHC, Genworth, and Canada Guaranty. For homes under $500,000, the minimum is 5% of the purchase price. For homes between $500,000-$999,999, it's 5% on the first $500,000 plus 10% on the excess. Homes over $1 million require 20% down and don't qualify for mortgage loan insurance. These rules ensure accessibility while managing lending risk and are consistent across all provinces under federal mortgage insurance programs.

Q: What is a good way to remember the answer to this Mortgage & Real Estate Finance question?

Picture a three-step staircase: Step 1 (under $500K) = 5% down, Step 2 ($500K-$999K) = 5% + 10% on excess, Step 3 (over $1M) = 20% down. Like climbing stairs, each level requires more effort (higher down payment) as you go higher in price. When you see a purchase price, immediately identify which 'step' it's on. Under $500K? Stay on step 1 with 5%. Between $500K-$999K? Use the split calculation. Over $1M? Jump to step 3 with 20%.

Q: What exam tip applies to this Mortgage & Real Estate Finance question?

Always identify the price range first: under $500K = 5%, $500K-$999K = split calculation (5% + 10%), over $1M = 20%. Double-check your math and ensure you're applying the correct percentage to the right portion.

Q: How does this Mortgage & Real Estate Finance concept apply in real world practice?

A first-time homebuyer finds a condo listed at $350,000 in Toronto. They've saved $20,000 and wonder if it's enough for a down payment. As their agent, you'd calculate 5% of $350,000 = $17,500 minimum down payment, confirming they have sufficient funds. You'd also explain they'll need additional money for closing costs, legal fees, and moving expenses, plus they'll pay CMHC insurance premiums since they're putting down less than 20%.

Question

Mortgage & Real Estate FinanceDown Payment RequirementsONEASY

What is the minimum down payment required for a home purchase of $350,000 in Canada?

Answer Options

A

$17,500 (5%)

B

$25,000 (7.14%)

C

$27,500 (7.86%)

D

$70,000 (20%)