Buying a House Over One Million Dollars in Canada
What You Should Know
- A minimum of 20% down payment is required to buy a house with a purchase price of over $1.5 million.
- CMHC mortgage insurance is not available for homes priced over $1.5 million.
- Most lenders typically offer a higher interest rate for the category of uninsurable mortgages, and homes priced over $1 million make a mortgage uninsurable (by the lender).
- The household income required by most lenders to qualify for a mortgage for a $1 million home is in the range of $180,000 - $210,000.
A decade ago, a million dollars would have bought you a detached home in an upscale neighbourhood of any Canadian city except for Vancouver. However, the typical (benchmark) house prices in Canada have risen by over 60% over the past decade, and average home prices in Toronto and Vancouver have been over the $1 million mark since the beginning of 2021. In July 2025, the average home price in Toronto was $1.05 million, and that in Vancouver was $1.27 million.
The increased home prices, coupled with high mortgage interest rates, raise concerns about affordability, and many Canadians are now left wondering how much they need to save to afford an average home in Toronto or Vancouver. Below, we have summarized everything you need to know about buying a home over a million dollars in Canada.
Income Needed for Mortgage to Purchase a House Over $1 Million in Canada
Lenders take many factors into consideration, such as the borrower's credit score, debt service ratio, and savings, before approving them for a loan. Mortgages on homes priced over $1 million ($1.5M for owner-occupied) cannot be insured through the CMHC mortgage insurance.
The household income required to buy a $1 million home ranges from $170,000 to $210,000 , depending mainly on your down payment and mortgage interest rate. This also depends on your housing costs and debt payments. The average income requirement for different house prices of over 1 million dollars, with minimum down payment for conventional and insured mortgages, is listed in the table below
| Price of Home | $1 Million | $1.2 Million | $1.499 Million | $2 Million |
|---|---|---|---|---|
| Annual Income Required for Conventional Mortgage | $180,000 | $210,000 | $260,000 | $360,000 |
| Annual Income Required for Insured Mortgage | $205,000 | $240,000 | $300,000 | N/A |
| Conventional Down Payment Required | $200,000 | $240,000 | $300,000 | $400,000 |
| Insured Down Payment Required | $75,000 | $95,000 | $125,000 | N/A |
*The calculations are based on a mortgage interest rate of 4.5% and 25 year amortization. The monthly debt payment is assumed to be $500, and the monthly heating cost and property tax is assumed to be $200 each. It is assumed that there is no condo fee to be paid every month.
Mortgage on a Million Dollar Home
Most Canadians will require a mortgage to buy a home worth over a million dollars. The two most important factors that will help you qualify for a mortgage for a $1 million home are the down payment and debt service ratio.
1. Down Payment
To buy a home priced at $1.5 million or more in Canada, buyers must save up at least 20% of the purchase price. This means a minimum down payment of $300,000 for a $1.5 million home. This is because the Canada Mortgage and Housing Corporation (CMHC) does not provide mortgage insurance for homes priced above $1.5 million
When a buyer purchases a home under $1.5 million with less than a 20% down payment, the mortgage is considered a high-ratio mortgage. In such cases, lenders are required to obtain mortgage insurance from CMHC or a private insurer, which protects the lender in case the borrower defaults. This insurance allows buyers to qualify for a mortgage with a minimum down payment of 5% on the first $500,000 and 10% on the remaining amount up to $1.5 million.
For example, if you're buying a $1 million home, the minimum down payment would be:
5% of $500,000 = $25,000
10% of the remaining $500,000 = $50,000
Total minimum down payment = $75,000
However, since this is less than 20%, mortgage insurance would be required, and the premium would be added to your mortgage or paid up front.
If you're buying a $1.5 million home, the maximum mortgage amount would be $1.2 million, assuming a 20% down payment. You would also need to budget for closing costs, which typically range from 3% to 4% of the purchase price. For a $1.5 million home, this could mean an additional $45,000 to $60,000.
2. Debt Service Ratio
Debt service ratios are formulas recommended by the CMHC to determine the maximum mortgage amount a household can afford. By adding the down payment to the maximum mortgage amount, you can find the maximum purchase price you can qualify for. There are two kinds of debt service ratios – Gross Debt Service (GDS) and Total Debt Service (TDS). These ratios compare your income with your housing costs and current debt to estimate how much you can afford to borrow.
Gross Debt Service (GDS):
Also called the housing expense ratio, Gross Debt Service is the ratio of your housing costs to your income. Housing costs include expenses such as monthly mortgage payments, heating bill payments, property tax, half of condo fees, half of HOA fees, and other applicable rental fees. CMHC’s maximum allowed limit for GDS is 39%.
Total Debt Service (TDS):
In addition to housing costs, TDS takes into account your debt payments such as credit card debt, car loan payments, line of credit debt, and other debts. It is calculated in a similar manner as the GDS. TDS is the ratio of the sum of housing costs and debt payment to your income. For credit card payments and unsecured line of credit payments, CMHC assumed the minimum payment to be greater of the actual minimum payment and 3% of the outstanding balance plus interest. The amortization period for a secured line of credit is considered to be 25 years. CMHC’s maximum allowed limit for TDS is 44%.
Mortgage Payment and Interest on Million Dollar Home
To calculate a $1 million mortgage’s monthly payment and the interest you will end up paying, you need to take into account the mortgage interest rate and the amortization period. For the interest calculation, the payment frequency also makes a difference. The table below shows the monthly payments and total interest paid for different home prices with minimum down payment for a conventional (uninsured) mortgage, an amortization period of 25 years, and an interest rate of 4%.
| Home Price | $1,000,000 | $1,200,000 | $1,500,000 | $2,000,000 |
| Down Payment | $200,000 | $240,000 | $300,000 | $400,000 |
| Monthly Payments | $4,208 | $5,050 | $6,312 | $8,416 |
| Total Interest Paid | $462,448 | $554,938 | $693,673 | $924,897 |
*The calculations are based on a mortgage interest rate of 4%.
Read below to understand how the monthly payments and total interest change based on the interest rate and amortization period.
Mortgage Payment on a Million Dollar Home
The maximum conventional mortgage amount for a million-dollar home is $800,000. Notably, the interest rate for uninsurable mortgages is generally higher than that for insured mortgages. At a rate of 4.69%, the monthly payment for an amortization period of 25 years comes to $4,513. The table below shows monthly payments for different amortization periods for a $1 million home for a 4.69% interest rate.
| Amortization Period | 15 years | 20 years | 25 years | 30 years |
| Monthly Payments | $6,179 | $5,124 | $4,513 | $4,123 |
*The calculations are based on a mortgage interest rate of 4.69%.
On the other hand, if you get a lower interest rate, your monthly payment would be lower, but if you get a higher interest rate, the monthly payments would be more. The table below shows monthly payments for a million-dollar home with different interest rates for a 25-year amortization.
| Interest Rate | 2.5% | 3.5% | 4.5% | 5% |
| Monthly Payments | $3,584 | $3,994 | $4,428 | $4,653 |
Use our mortgage payment calculator to calculate the monthly payments for different mortgage amounts.
Interest on a Million Dollar Home
If you assume an interest rate of 4.69% and an amortization period of 25 years, the total interest you end up paying would be $553,803. Adding this to the principal amount of $800,000 and the down payment of $200,000, the home would cost you a total of $1,553,803. The table below shows the interest paid on a million-dollar home for different amortization periods at an interest rate of 4.69%.
| Amortization Period | 15 years | 20 years | 25 years | 30 years |
| Total Interest Paid | $312,278 | $429,747 | $553,803 | $684,140 |
*The calculations are based on a mortgage interest rate of 4.69%.
The table below shows the total interest paid for different interest rates for a million-dollar home.
| Interest Rate | 2.5% | 3.5% | 4.5% | 5% |
| Total Interest Paid | $275,119 | $398,249 | $528,335 | $595,852 |
There are some ways to reduce the interest payment, such as by opting for accelerated bi-weekly or accelerated weekly payments.
Understanding Mortgage Insurance Categories and Their Impact on Rates
Uninsurable mortgages are loans that cannot be insured, either because they do not meet CMHC’s eligibility criteria, or because they are refinanced mortgages, which are generally not insurable unless the refinancing is for adding a legal subsidiary or secondary unit to the property.
Common reasons a mortgage may be uninsurable include:
- A purchase price over $1 million (or over $1.5 million if owner-occupied),
- An amortization period exceeding 25 years, unless the borrower qualifies under the CMHC Homeowner Start program (e.g., first-time buyers or buyers of newly built homes),
- An equity take-out refinance.
Because these mortgages fall outside insurable guidelines, interest rates on uninsurable mortgages are typically the highest.
Insured mortgages are backed by mortgage default insurance, which is mandatory for high-ratio mortgages—those with a down payment of less than 20%. This insurance protects the lender in case of borrower default and allows for the lowest available interest rates.
Uninsured mortgages refer to low-ratio mortgages (with 20% or more down payment) where the borrower qualifies for but does not obtain insurance. These mortgages are still eligible for competitive rates, though typically not as low as insured mortgages.
Rate Comparison Summary:
- Insured mortgages → Lowest rates
- Uninsured mortgages → Moderate rates
- Uninsurable mortgages → Highest rates
What Can a Million Dollars Buy You in Different Canadian Cities?
House prices vary significantly across Canada. In cities like Toronto and Vancouver, where the average home prices are over $1 million, buyers can expect to buy a townhouse or a semi-detached home for $1 million. The Toronto housing market and Vancouver housing market are much more expensive than markets such as the Edmonton housing market and Winnipeg housing markets, where you could buy detached houses with large backyards for the same amount of money. The table below compares what could a million dollars buy you in major Canadian cities.
| City | Average Home Price (July 2025) | $1 Million Home |
|---|---|---|
| Toronto GTA | $1,052,000 | 2 or 2+1 bedroom, 2 bathroom condo in downtown (700 - 1000 sqft area). Less than ten years old, 3-bedroom, 3 bathroom townhouse or semi-detached home outside downtown. 3 bedroom, 3 bathroom detached or semi-detached home on a 2,500 - 3,000 sqft plot in the suburbs. |
| Vancouver | $1,242,000 | 2 bedroom, 2 bathroom condo in Vancouver or a 3 bedroom 3 bathroom townhouse in Burnaby, Coquitlam, Surrey, or Richmond. |
| Montreal | $659,000 | 2 bedroom, 1 or 2 bathroom high-rise condo (>1000 sqft area); or 3 bedroom 2 bathroom low-rise condo, townhouse, semi-detached or plex in the Island of Montreal. 4 or 3 bedroom, 2 bathroom detached home in the suburbs. |
| Calgary | $617,000 | 3+1 bedroom, 3 or 4 bathroom detached house with finished basement. |
| Ottawa | $723,000 | 4 or 3 bedroom, 3 or 4 bathroom detached house. |
| Hamilton | $822,000 | 3 bedroom, 3 bathroom or 3+1 bedroom 4 bathroom detached home. |
| Edmonton | $463,000 | Less than eight years old 5 bedroom, 4 bathroom detached house with garage, patio, spa ensuite, large walk-in closets, and several premium features. |
| Winnipeg | $399,000 | >Less than five years old 5 bedroom, 4 bathroom detached house with garage, patio, spa ensuite, large walk-in closets, and several premium features on a >3,000 sqft plot. |
Updated August 2025
Considerations Before Buying a Million Dollar Home
Before deciding to buy a house worth a million dollars, you should consider several factors.
1. Your monthly payments may increase over time:
One important thing to note is that the monthly payments may change depending on the ongoing interest rates. During 2022 and 2023, many borrowers with a variable rate mortgage saw their monthly mortgage payments increase following the Bank of Canada (BoC) rate hikes. Even though this is not always the case, you may have to renew your mortgage at a higher interest rate at the end of the term. Even if you can afford a million dollar home right now, you should consider if you would still be able to afford it if the interest rates go up by 2% - 3% so that you don’t find yourself in an unfavorable situation in the future.
2. You may not qualify for the government’s first-time home buyers incentive:
If you were hoping to pay a part of the downpayment with the government of Canada’s assistance, you would likely not be able to do so for a million-dollar home. The government of Canada offers a first-time home buyers incentive, through which first-time buyers can receive 5% to 10% of their home’s purchase price towards a downpayment. However, to be eligible for this benefit, the household income needs to be below $120,000 ($150,000 for Toronto, Vancouver, and Victoria). As discussed above, this income will likely not be sufficient to buy a home worth a million dollars, and the ones who can afford a million-dollar home would not qualify for the benefit.
Bottom Line
The average homes in Toronto and Vancouver are priced around a million dollars now. To be able to buy a home priced over $1 million, you would need to save up at least 20% of the house price for a down payment. On average, the lender would require your household income to be $225,000 to be approved for a million-dollar home in Canada. This would also mean that you would not qualify for the government’s first-time homebuyer incentive, and thus you would not be able to receive any down payment assistance.
Disclaimer:
- Any analysis or commentary reflects the opinions of WOWA.ca analysts and should not be considered financial advice. Please consult a licensed professional before making any decisions.
- The calculators and content on this page are for general information only. WOWA does not guarantee the accuracy and is not responsible for any consequences of using the calculator.
- Financial institutions and brokerages may compensate us for connecting customers to them through payments for advertisements, clicks, and leads.
- Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.