If you’ve been eyeing the real estate market in major Canadian cities, you might feel like you’re trying to get into an exclusive club with a velvet rope that has a bouncer named Inflation. Home prices are soaring, and if you’re planning to make a $20,000 down payment, it’s time we break down whether that’s enough to get you past the door without having to fork over a ton for mortgage insurance.

Let’s start with the numbers. In 2025, major Canadian cities like Toronto and Vancouver are expected to continue their trend of high home prices, with averages hovering around $1 million or even more. Now, a $20,000 down payment sounds like a nice chunk of change, but when you do the math, that’s just 2% of a $1 million home. Most lenders require a minimum of 5% down for homes priced above $500,000, and if you go below that threshold, you’ll be facing a mortgage insurance fee that can add up faster than your streaming subscriptions.

Mortgage insurance is like the annoying friend who tags along when you didn’t really invite them. You might need it if your down payment is less than 20% of the home’s price. This insurance protects the lender in case you can’t make your mortgage payments and, guess what? It’s an extra cost on top of your mortgage, which means your monthly payments could be a lot heavier than you anticipated.

So, what can you do if your budget isn’t quite cutting it? First off, consider saving more. Aiming for that 20% down payment can save you from mortgage insurance altogether. For a $1 million home, that means saving up $200,000. It might sound like a Herculean task, but with strategic saving and perhaps even investing in a high-interest savings account or a TFSA, you can make it more manageable.

Another option is to look beyond the downtown core. Sometimes, the suburbs can offer gems that are easier on the wallet while still providing that cozy community feel. Think of it like moving from the bustling city to your own version of the Shire—more space, less stress, and often, a much friendlier price tag.

Additionally, consider government programs aimed at helping first-time homebuyers. Canada has introduced initiatives like the First-Time Home Buyer Incentive, which can give you a little boost in your purchasing power. It’s like having a sidekick in your superhero journey to homeownership, helping you tackle those high prices.

In the end, while $20,000 might feel like a solid start, it’s wise to do your homework and plan accordingly. Whether that means saving more, looking at different neighborhoods, or taking advantage of government programs, there are always strategies to make your dream of homeownership a reality—even in a market that feels like it’s playing hard to get. Just remember, even Mario had to collect a few coins before he could save the princess; it’s all part of the adventure!