Buying with 5% down in Quebec: the real cost (CMHC premium + 9% tax)
You can get into the market with just 5% down. That's the federal rule, and it exists to help first-time buyers. But between the 5% you see advertised and the amount you really need in your account, two uninvited guests have joined the bill: mortgage loan insurance premiums (CMHC, Sagen or Canada Guaranty) and Quebec's 9% tax on that premium.
Here is the real math, with the 2026 schedules, so you don't show up at the notary's office empty-handed.
The minimum down payment: the 5% / 10% / 20% rule
Since December 15, 2024, the federal minimum down payment rules are:
| Purchase price | Minimum down payment |
|---|---|
| Up to $500,000 | 5% |
| Portion between $500,000 and $1,500,000 | 10% |
| $1,500,000 and more | 20% (loan insurance no longer available) |
In practice: for a $400,000 condo, the minimum is $20,000. For a $600,000 house, it's $25,000 (5% of the first $500,000) + $10,000 (10% of the remaining $100,000) = $35,000.
But beware: as soon as your down payment is less than 20% of the purchase price, federal law requires your loan to be insured against default. That insurance protects the bank, not you — and you're the one who pays for it.
Test different scenarios with [our down payment calculator](/en/quebec-down-payment-calculator): it applies the premium grid and Quebec's 9% tax automatically.
The CMHC premium: the 2026 grid by bracket
The premium is a percentage of the amount borrowed (after your down payment), usually added to your loan rather than paid in cash. All three insurers — CMHC, Sagen and Canada Guaranty — use the same schedule, published by CMHC:
| Loan-to-value ratio | Premium (% of loan) |
|---|---|
| Up to 80% | No premium required |
| 80.01% to 85% | 2.80% |
| 85.01% to 90% | 3.10% |
| 90.01% to 95% | 4.00% |
| 90.01% to 95% (non-traditional down payment) | 4.50% |
Two important nuances:
- Amortization surcharge: if you're a first-time buyer (or buying new) and choose a 30-year amortization, add 0.20% to the premium — for example 4.20% instead of 4.00% at 5% down.
- The premium can be financed, the tax cannot: in Quebec, a 9% tax applies to the insurance premium (as in Ontario and Saskatchewan). CMHC states it clearly: this provincial tax cannot be added to the loan. It is therefore payable in cash, at the notary's office, on signing day. It's the most commonly forgotten fee in first-time buyers' budgets.
⚠️ September 2026 note: mortgage analysts report that Revenu Québec would harmonize this reduced 9% rate with the full QST rate of 9.975% for premiums paid after December 31, 2026. This is not yet a confirmed measure at the time of writing — if you close in early 2027, ask your broker or notary which rate applies to your file.
Worked example: a $400,000 condo with 5% down
Let's put the numbers on the table. Rate used: 4.49%, 25-year amortization.
Step 1 — the down payment
- Price: $400,000
- Down payment (5%): $20,000
- Amount borrowed: $380,000
Step 2 — the insurance premium
- Loan-to-value ratio: 95%
- CMHC premium (4.00%): $380,000 × 4% = $15,200
- This premium is added to the loan → total loan: $395,200
Step 3 — Quebec's tax
- 9% tax on the premium: $15,200 × 9% = $1,368, payable in cash
The bottom line
| Scenario | Monthly payment | Cash on closing day (down payment + tax) |
|---|---|---|
| 5% down ($380,000 + premium) | $2,185 | $21,368 |
| 10% down ($360,000 + $11,160 premium) | $2,052 | $41,004 |
| 20% down ($320,000, no premium) | $1,769 | $80,000 |
The gap between 5% and 20% isn't just the $15,200 premium: over 25 years, the payment difference reaches nearly $415 a month, or about $125,000 in extra interest. Going from 5% to 10% down already drops the premium from 4.00% to 3.10% — a $4,040 saving on the premium and $364 on the tax, just by adding $20,000 to the down payment.
Check the effect on your payment with [our mortgage calculator](/en/quebec-mortgage-calculator), which includes the CMHC premium, the 9% tax and welcome tax in the closing-day cash.
Closing-day cash: budget more than the down payment
Many buyers budget for the down payment and forget everything added at the notary's office:
- The 9% tax on the premium ($1,368 in our example)
- Welcome tax (transfer duties) — a few weeks after closing; in Quebec it's calculated by bracket and costs more in Montreal
- Notary, survey and inspection fees
As a rule of thumb, count 2% to 3% of the purchase price in accessory fees, on top of your down payment and the tax on the premium. If you're not yet familiar with the tax rates eating into your paycheque and limiting your savings, our [Quebec pay guide](/en/blog/quebec-paycheck) and [RRSP vs FHSA](/en/blog/rrsp-fhsa) for your down payment are worth a read — the most profitable down payment is often the one your taxes partly funded.
The $1.5M cap: the old $1M rule has changed
A useful reminder: until 2024, loan insurance was only available up to $1M. Since the federal reform, properties up to $1.5M remain eligible for insurance (and therefore for less than 20% down). Above $1.5M, no insurance is available: 20% down becomes mandatory, premium or not.
Another little-known point: CMHC refunds 25% of the premium for the purchase of an energy-efficient home (Eco program). In our example, that's $3,800 back — check with your lender before signing.
So, buying with 5%: good or bad idea?
It's neither a trap nor a bargain — it depends on your situation:
- It makes sense if you're renting at a high price and every month of waiting costs you more than the premium: getting in early builds equity while you'd otherwise be paying rent.
- It's expensive if you can wait 1 or 2 years to reach 10% or 15%: each premium bracket you cross lowers the rate (4.00% → 3.10% → 2.80% → 0%).
- It demands liquidity: down payment + 9% tax + closing costs. If your $20,000 is everything you have, you're running on empty on signing day — always keep a cushion for surprises.
The best question isn't "can I buy with 5%?" but "what does each down payment bracket really cost me?". The answer can be calculated — and now you know how.
Frequently asked questions
What is the minimum down payment to buy in Quebec in 2026?
5% on the first $500,000 bracket, then 10% on the portion between $500,000 and $1,500,000. Above $1.5M, loan insurance is no longer available and 20% down becomes mandatory.
How much is the CMHC premium with 5% down?
With a 95% loan-to-value ratio, the premium is 4.00% of the amount borrowed (4.50% with a non-traditional down payment). On a $380,000 loan, that's $15,200, usually added to the loan. If you choose a 30-year amortization as a first-time buyer, add a 0.20% surcharge.
What is the 9% tax on the CMHC premium in Quebec?
Quebec applies a 9% tax on mortgage loan insurance premiums. Unlike the premium itself, this tax cannot be added to the loan: it is payable in cash at the notary's office. Analysts report a possible harmonization to 9.975% for premiums paid after December 31, 2026.
Can I avoid the CMHC premium?
Yes, with a down payment of 20% or more of the purchase price, no loan insurance is required. In between, each bracket lowers the premium: 10% down = 3.10%, 15% down = 2.80%. CMHC also refunds 25% of the premium for the purchase of an energy-efficient home.
Is mortgage loan insurance available above $1.5M?
No. Since the federal reform, properties up to $1.5M remain eligible for loan insurance (and therefore for less than 20% down). Above that cap, 20% down is mandatory.
Can the CMHC premium be added to my loan?
Yes, that's the most common practice: the premium is added to the mortgage amount and amortized with it. The provincial tax on the premium (9% in Quebec), however, must always be paid in cash at closing.