The down payment corresponds to the sum required by a financial institution as a personal contribution from the buyer when taking out a mortgage loan. Its amount is calculated as a percentage of the sale price, variable between a minimum of 5% and 20%.
When the down payment is less, the bank also requires the purchase of mortgage loan insurance. This protects the lender in the event of default.
However, you should know that this type of insurance does not cover houses whose value is greater than one million dollars.
The Canada Mortgage and Housing Corporation (CMHC) has defined two formulas that allow financial institutions to calculate the maximum amount a future buyer can borrow based on their income. By adding your down payment to your borrowing capacity, you can estimate the maximum purchase price you can afford.