If you’re a first-time buyer or move-up buyer eyeing a $1M home, you’ve likely asked yourself: Should I put 20% down and avoid CMHC insurance, or go with less and lock in a better interest rate?
The answer? It depends.
Let’s dive into a real-life breakdown using current 2025 rates in Ontario and explore what your money is really doing behind the scenes.
Disclaimer:
This blog is for illustration and informational purposes only. All figures are estimates based on current interest rates and typical mortgage structures as of 2025. Actual rates, terms, and insurance premiums may vary. Mortgage payments are shown as consistent throughout the amortization period for simplicity, though they may change over time. Please consult your mortgage broker or financial advisor for advice specific to your situation.
🔍 The Scenarios: $1M Home Purchase
| $1,000,000 HOME | 13% Down | 20% Down |
| Down Payment | $130,000 | $200,000 |
| CMHC Insurance | $26,970 | $0 |
| Mortgage Amount | $896,970 | $800,000 |
| Rate (5-Year Fixed) | 4.00% (insured) | 4.34% (uninsured) |
| Monthly Payment | $4,718.24 | $4,319.11 |
📈 After 5 Years: What Have You Really Paid?
Let’s compare how much goes toward interest, principal, and how much equity you’ve built in each case over 5 years.
| $1,000,000 HOME | 13% Down | 20% Down |
| Total Interest Paid | $166,972 | $163,421 |
| Principal Paid | $116,122 | $99,038 |
| Less CMHC Premium | -$26,970 | — |
| Net Principal | $89,152 | $99,038 |
| Total Equity | $219,152* | $299,038* |
*plus any appreciation or depreciation
Quick takeaway: Even though you pay more interest long-term with 20% down due to a slightly higher rate, you build more equity faster because of your bigger initial down payment.
📊 Full 25-Year Mortgage Comparison
| Item | 13% Down | 20% Down |
| Total Interest Paid (25 yrs) | $518,503 | $512,295.91 |
| Total Principal Paid (25 yrs) | $896,970.00 | $800,000.00 |
| CMHC Premium | $26,970.00 | $0.00 |
| Net Principal (Minus CMHC) | $870,000.00 | $800,000.00 |
| Down Payment | $130,000.00 | $200,000.00 |
| Total Paid After 25 Years | 1,545,473.00 | 1,512,295.91 |
✅ Key Pros & Cons
13% Down – Lower Barrier to Entry
Pros:
- Lower rate (insured mortgage)
- Enter the market sooner with less cash upfront
- Monthly payments still manageable
Cons:
- $26,970 insurance premium (added to mortgage)
- Slower equity growth
- More scrutiny from CMHC guidelines
20% Down – More Control, Less Insurance
Pros:
- No CMHC insurance fees
- Bigger equity cushion from day one
- More flexibility with lenders
Cons:
- Requires more cash upfront
- Slightly higher rate (as of March 2025)
- Opportunity cost: could that extra $70K be better used elsewhere?
🏋️️ The Bottom Line
There’s no one-size-fits-all answer. If you’re tight on savings but want to stop renting and start building equity, 13% down is a solid move—especially with today’s lower insured rates. If you’ve got the 20% saved and want to avoid CMHC insurance altogether, that’s a smart long-term play.
Want help figuring out which option is best for you?
Let’s run your numbers together and map out a game plan. This is one of the biggest financial decisions you’ll make—let’s make sure it’s an informed one.
Kathleen Miller | Real Estate with Clarity & Care
Serving York Region and beyond – helping buyers move with confidence.