By Hami Tahm · Published September 2026 · Updated September 2026 · 9 min read
Million-Dollar House Mortgage in Canada: Down Payment and Income You Actually Need
Do you need 20% down and how much income do you need for a $1 million house in Canada?
You do not need 20% down on a $1,000,000 home — that requirement only starts at $1.5 million. At exactly $1 million, the standard blended schedule still applies: 5% on the first $500,000 plus 10% on the remainder, for a minimum down payment of $75,000. As a worked, illustrative example at a representative 2026 rate: with the 7.5% minimum down, expect to need roughly $232,000 in gross annual household income to pass the stress test with no other debts; putting 20% down instead removes the CMHC premium and the extra financed principal, lowering that to roughly $197,000. Your actual numbers depend on your rate, property tax, and debts — use the mortgage qualifier calculator for a precise figure.
Key Takeaways
- The 20%-down / no-CMHC-insurance rule starts at $1.5 million, not $1 million — a $1,000,000 home still qualifies for insured financing at 7.5% minimum down.
- Putting 20% down on a $1M home is optional, not required — but it removes the CMHC premium entirely, which can lower your qualifying income by tens of thousands of dollars a year.
- In this page's worked example, moving from 7.5% down to 20% down drops the approximate income requirement from about $232,000 to about $197,000/year — a $35,000 difference driven mostly by the CMHC premium disappearing, not just the smaller mortgage.
- The mortgage stress test qualifies you at the higher of your contract rate + 2%, or the OSFI floor of 5.25% — always model at the qualifying rate, not the rate you'll actually pay.
- Property tax, land transfer tax, and (if under 20% down) CMHC premium PST all add real cost on top of the mortgage payment itself on a million-dollar purchase.
The figures on this page are a worked, illustrative example at representative 2026 rates and an assumed property tax level — not a quote or a guarantee of what you'll qualify for. Your actual rate, property tax, debts, and lender-specific criteria will change the real numbers. Run your own figures through the tools linked below, and confirm with a mortgage broker before making an offer.
The "You Need 20% Down on a Million-Dollar House" Myth
This is one of the most commonly repeated inaccuracies in Canadian mortgage content, and it's understandable why: for years, $1,000,000 WAS the insured-mortgage price ceiling, so a million-dollar home genuinely did require 20% down and conventional (uninsured) financing. That changed on December 15, 2024, when the federal government raised the insured-mortgage purchase-price cap from $1 million to $1.5 million as part of a broader mortgage reform package, implemented through CMHC's insurance rules. Since then, a $1,000,000 purchase with less than 20% down is eligible for insured financing under the same blended schedule that applies to any home under $1.5 million: 5% on the first $500,000, plus 10% on the portion from $500,000 to $1,500,000. On an even $1,000,000 purchase, that works out to a minimum down payment of $75,000 — 7.5% of the price, not 20%.
Where 20% actually becomes mandatory
The 20%-down, no-insurance requirement applies once the purchase price reaches $1,500,000. Between $1,000,000 and $1,499,999, you're still in insured-financing territory at the blended 5%/10% rate. Check your exact minimum with the down payment calculator at your specific purchase price.
Worked Example: 7.5% Down vs. 20% Down on a $1,000,000 Home
Putting the legal minimum down is optional, not required — and on a purchase this size, the choice measurably changes the income you need to qualify. Using a representative 4.99% contract rate (5-year fixed, illustrative), a 25-year amortization, and $8,000/year in property tax plus $150/month in heating as illustrative carrying costs:
| Minimum Down (7.5%) | 20% Down | |
|---|---|---|
| Down payment | $75,000 | $200,000 |
| Base mortgage | $925,000 | $800,000 |
| CMHC premium (4.00% band) | $37,000 | $0 — not required |
| Total insured/financed mortgage | $962,000 | $800,000 |
| Monthly payment @ 4.99% contract rate | $5,590 | $4,648 |
| Monthly payment @ 6.99% stress-test rate | $6,732 | $5,598 |
| Approx. gross annual income needed (GDS 39%, no other debts) | $232,000 | $197,000 |
The gap is bigger than the extra $125,000 down payment alone would suggest. Putting 20% down removes two things at once: the $37,000 CMHC premium (which itself gets added to the mortgage and financed at the mortgage rate), and $125,000 of principal that would otherwise be borrowed. Both push the stress-tested monthly payment down, which is what lowers the required income. Run your own rate, property tax, and down payment amount through the mortgage qualifier calculator — this worked example uses illustrative figures, and your actual qualifying income will move with current rates and your specific property tax bill.
How the Stress Test Applies at This Price Point
The federal mortgage stress test doesn't change at higher purchase prices — you still qualify at the higher of your contract rate plus 2 percentage points, or OSFI's current floor of 5.25%. What changes is how much that 2-point buffer costs you in dollar terms: on a near-$1-million mortgage, 2 extra percentage points of qualifying rate represents a much larger monthly payment gap than the same 2 points on a $400,000 mortgage. See our full mortgage stress test calculator to see exactly where your qualifying rate lands today.
Costs Beyond the Mortgage Payment
- Property tax. Scales with assessed value and varies significantly by municipality — check your actual rate with the property tax calculator rather than assuming this page's illustrative $8,000/year figure applies to your address.
- Land transfer tax. Ontario and Toronto's tiered LTT brackets both reach their top rate well below the $1,000,000 mark — model your exact LTT with the Ontario land transfer tax calculator.
- CMHC premium and its provincial sales tax. If you're under 20% down, the premium itself gets added to and financed within your mortgage — but in Ontario, Quebec, and Saskatchewan, provincial sales tax on that premium (8%, 9%, and 6% respectively) is a separate cost you pay in cash at closing; it cannot be rolled into the mortgage. Break both numbers down with the CMHC insurance calculator.
▶ Run your exact numbers
- Mortgage Qualifier CalculatorEnter your actual income, debts, and down payment for a precise qualifying figure.
- Guided Homebuyer JourneyCarry your numbers through the stress test, payment, down payment, and closing costs.
Frequently Asked Questions
The figures on this page are a worked, illustrative example at representative 2026 rates and an assumed property tax level — not a quote or a guarantee of what you'll qualify for. Your actual rate, property tax, debts, and lender-specific criteria will change the real numbers. Run your own figures through the tools linked above, and confirm with a mortgage broker before making an offer.
Sources
- CMHC — Eligible Loan Purposes and Insured Mortgage Price Ceiling
- OSFI — Residential Mortgage Underwriting Guideline B-20
▶ Related guides
- How Much Should You Spend on a HouseGeneral income-to-price budgeting framework beyond the $1M scenario.
- Income Needed for a Mortgage in CanadaIncome requirements across a range of purchase prices, not just $1 million.