Decoding Down‑Payments and Mortgage Insurance for Mississauga Homebuyers

December 17, 2025 | Posted by: Lorne Andrews

Decoding Down‑Payments and Mortgage Insurance for Mississauga Homebuyers

When you picture your future front porch, you probably don’t imagine numbers. Yet, the size of your down‑payment influences everything—from your monthly mortgage to whether you need mortgage default insurance.

Minimum Down‑Payment Rules (Updated 2024)

Recent federal changes mean you can now put less than 20 % down on homes priced up to $1.5 million. Here’s the breakdown:

These rules provide flexibility, allowing first‑time buyers to enter the market sooner. But remember: a smaller down‑payment means larger monthly payments and, if it’s under 20 %, mortgage insurance.

What Is Mortgage Default Insurance?

If your down‑payment is below 20 %, lenders require mortgage default insurance to protect themselves if you can’t make payments. Premiums typically run between 2.8 % and 4.2 % of your mortgage balance. That fee can be rolled into your mortgage, but you’ll pay interest on it. In Ontario, you also pay provincial tax on the premium at closing.

Insurance isn’t available for homes above $1 million. If you’re shopping at the higher end of Mississauga’s market, be prepared for a 20 % down‑payment.

Strategies to Boost Your Down‑Payment

1. First Home Savings Account (FHSA) – Save up to $8,000 per year tax‑free and withdraw funds tax‑free for your first home.

2. RRSP Home Buyers’ Plan – Borrow up to $35,000 from your RRSP (or $70,000 per couple) tax‑free and repay over 15 years.

3. Gifted funds – Lenders accept down‑payments gifted from immediate family; you’ll sign a letter confirming it’s a true gift.

4. Side income or budget cuts – Take on freelance work or temporarily reduce discretionary spending to top up your savings.

Do You Really Need 20 %?

A 20 % down‑payment eliminates the need for insurance and reduces your monthly payments. However, waiting years to save the full 20 % could mean higher home prices and missed equity growth. A smaller down‑payment can be a strategic choice—especially if you expect your income to rise.

Your Trusted Partner

The right mortgage strategy can reduce stress, lower interest costs, and create flexibility for the future—but only if it’s reviewed regularly.

If you’re unsure whether your current mortgage still fits your goals, or you’re planning a purchase or refinance, now is the right time to get clarity.

Let’s review your situation and map out smart next steps—no obligation, no guesswork.
You can reach me directly, book a call, or send a quick message:

Lorne Andrews
Mortgage Broker | Dominion Lending Centres Expert Financial
 Mississauga & Greater Toronto Area
416-276-6445
lorne@expertfinancial.ca

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