What is the minimum down payment required for a home purchase of $600,000 in Canada?
Correct Answer
B) $35,000 (5.83%)
For purchase prices above $500,000 and below $1.5 million, the minimum down payment is 5% of the first $500,000 plus 10% of the portion above $500,000. For a $600,000 home: (5% x $500,000) + (10% x $100,000) = $25,000 + $10,000 = $35,000, which is about 5.83% of the price. The tiered rule now runs to $1.5 million; homes of $1.5 million or more need 20% down.
Why This Is the Correct Answer
This is correct because 5% of $500,000 is $25,000 and 10% of the remaining $100,000 is $10,000, for a total of $35,000, or 5.83% of the $600,000 price.
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