FEDERAL MINIMUM
Canada minimum down payment.
The minimum is not 5% of any price. It breaks at $500,000 and again at $1.5 million.
The schedule
On the first $500,000 the minimum is 5%. On a $500,000 home that is $25,000. On the portion between $500,000 and $1.5 million the minimum is 10% of that portion. A $750,000 home is $25,000 plus 10% of $250,000, which is $50,000. A price over $1.5 million needs 20% of the whole price, and the mortgage is not the insured kind this rule was written for.
Under 20% down, default insurance is added to the loan if the price is within the insured cap. The premium is not optional at a federally regulated lender, and it is not the stress test. The stress test is a rate. Insurance is a lump added to principal. Both sit in the stress test calculator.
Questions
Is 5% enough on an $800,000 home?
No. Five percent of the first $500,000 is $25,000, then 10% of the remaining $300,000 is $30,000. The minimum is $55,000.
Does a bigger down payment remove the stress test?
No. The qualifying rate still applies at a federally regulated lender. Twenty percent down removes the insurance premium, not the test.