How Much Does A $250,000 Mortgage Cost In Canada

How Much Does A $250,000 Mortgage Cost In Canada

Written by Bryan Daly
Fact-checked by Caitlin Wood
Last Updated July 29, 2022

Mortgage prices fluctuate greatly from region to region and home to home. That said, the average house or condo costs hundreds of thousands of dollars these days, which is why it can be extremely difficult to qualify for a mortgage. If you’re thinking of purchasing a house, it’s important to consider how much mortgage you can qualify for and how the payments will fit into your budget. 

If you’re thinking of financing a home worth $250,000, read this to find out what your mortgage payments will be like and how much it’ll cost you.

What Would Your Payments Be For A $250,000 Mortgage?

Similar to the possible income requirements, the size of your mortgage payments depends on your lender’s conditions and overall financial health. Additionally, you’ll have to factor in your interest rate, down payment and amortization period. 

Here’s an example of how much your mortgage payments would be on a $250,000 house in Canada, let’s do a basic calculation of your potential loan payments:


  • You’re looking for a $250,000 house to purchase your first house.
  • You have enough money for a 10% down payment ($25,000).
  • You manage to qualify for a 3.00% interest rate.
  • You choose a standard 5-year closed mortgage term, with no extra payments. 
  • You also have to buy mortgage default insurance. 
  • House Price = $250,000
  • Down Payment = $25,000 
  • Mortgage Default Insurance = $6,975
  • Total mortgage amount = $231,975

Here’s what your loan payments would look like for a $250,000 mortgage once we factor in different amortization periods and payment frequency:

Payment Frequency15-Year Amortization25-Year Amortization
Bi-Weekly Payment$738$506
Monthly Payment$1,600$1,098

How Much Interest Would You Pay On A $250,000 House? 

Using the same example as above, let’s determine how much interest you could be charged on a $250,000 house if it had a common 5-year closed term and monthly payments. In this case, the amount you’ll pay is based mainly on your interest rate and term length.

Interest Rate 15-Year Amortization PeriodMonthly PaymentInterest Paid Over 5 YearsTotal Principal PaidTotal Balance Remaining
1.5%5-year closed term $1,439$14,744$71,624$160,351
2.5%5-year closed term$1,545$24,780$67,942$164,033
3.0%5-year closed term$1,600$29,855$66,139$165,836
Interest Rate 25-Year Amortization Period Monthly PaymentInterest Paid Total Principal PaidTotal Balance Remaining
1.5%5-year closed term $927$15,902$39,733$192,242
2.5%5-year closed term$1,039$26,714$35,636$196,339
3.0%5-year closed term$1,098$32,173$33,695$198,280

How Much Do You Need As A Down Payment For A $250,000 House?    

When buying a home, most real estate experts will tell you to put down at least 20% of a home’s total sales price. Usually, this is because it means you won’t have to buy CMHC mortgage loan insurance, also known as mortgage default insurance. Plus, by offering more money upfront, you might have better approval odds, a shorter amortization period and less interest to pay. 

Depending on the price of your home, where you apply and how strong your finances are some lenders will allow you to pay as little as %5, if any other amount is too pricey.

Just remember that any down payment below 20% will require you to buy mortgage default insurance. 

For a home priced at $250,000 you’d need between $12,500 (5%) to $50,000 (20%) for a down payment.  

Price of the HomeMinimum Down Payment Required
$500,000 or less5%
More than $500,0005% down on the first $500,000, 10% on the remainder

How Much Mortgage Loan Insurance Would You Need If You Make The Minimum Down Payment?

As mentioned, CMHC mortgage loan insurance is mandatory for any down payment that’s less than 20%. Mortgage default insurance protects your lender if you default on your payments. Luckily, it can also help you qualify for a mortgage with a minimum down payment starting at 5%. 

Your mortgage default insurance premium is calculated using your loan-to-value ratio (mortgage loan amount ÷ purchase price). You can then pay your full premium upfront or ask your lender to add it to your mortgage payments.

Here is how much your premiums will cost you based on different LTVs:

LTVPremium on Mortgage AmountMortgage Default Insurance Amount
Up to and including 85% (15% down payment)2.80%$5,950
Up to and including 90% (10% down payment)3.10%$6,975
Up to and including 95%(5% down payment)4.00%$9,500
Do note, that lenders may still take our CMHC insurance on your mortgage for down payments of 20% or more

How Much Income Do You Need To Qualify For A $250,000 Mortgage?

Although $250,000 is a relatively “cheap” home in this day and age, it’s still a hefty sum of money that not everyone can comfortably afford with their other expenses. So, if you apply for a mortgage that’s large enough to cover it, lenders will have to examine your finances thoroughly. In particular, your income is going to be under the microscope. 

The personal income that you’ll need in order to qualify for a $250,000 mortgage can vary according to your current financial situation and lender’s requirements. Mostly, they’ll want to confirm that you’re steadily employed and earning enough to cover any mortgage payments, interest and fees that may come up over the life of your loan.

Learn How Much Other Mortgage Amounts Will Cost You
$300,000Learn More
$700,000Learn More
$1,000,000Learn More

Can You Qualify For The First-Time Homebuyer Incentive With a $250,000 Mortgage?

Yes! The First-Time Homebuyer incentive is a “shared equity” mortgage (with the Government of Canada) that helps you lower your loan payments. The federal program allows you to have easier access to buying your first home. This program allows you to borrow 5% or 10% of the home’s price from them, in exchange for a share of the property’s value. 

This amount would be added to your down payment, thereby reducing your mortgage amount, which would help lower your payments and overall costs. Repayment would then occur within a 25-year period or when you sell the home. Keep in mind that your total borrowed amount can be no more than 4 times your qualifying income (or 4.5 times for homes located in Toronto, Vancouver and Victoria). 

First-time homebuyers in Toronto, Vancouver or Victoria Census Metropolitan areas can qualify for slightly higher amounts. Individuals looking for homes in these areas can qualify with an income of $150,000, instead of $120,000 like the rest of the country. As such, any Canadian home that’s worth $480,000 or under (675,000 or under in the cities above) is eligible for this incentive.

$250,000 Mortgage FAQs

How much interest would I pay on a $250,000 mortgage?

The amount of interest you pay would depend on the interest rate you qualify for, your payment frequency, and your amortization schedule. For example, if you qualify for a $250,000 mortgage with an interest rate of 3% (amortized over 25 years and paid monthly), you’d pay approximately  $104,934. Similarly, if you’d change the interest rate to 4%, you’d pay approximately $144,515.

Should I put a small or high down payment? 

There are pros and cons to putting a small or high down payment. While high down payments (20% or more) lead to lower mortgage payments, a lower down payment can lead to lower interest rates because you have to purchase mortgage default insurance. 

Where can I get a $250,000 mortgage in Canada?

You can get a $250,000 mortgage from a bank, credit union or alternative mortgage lender. If you have good credit and strong finances, you may be able to qualify with a bank, however, if you have bad credit or a low income, you may have better luck with an alternative mortgage lender. These lenders have more flexible requirements, making it easier to qualify for a mortgage. 

Trying To Qualify For A $250,000 Mortgage In Canada?

Thankfully, there are many ways you can accomplish that goal, whether it’s for the purposes of financing your first home or second. To learn more about what it takes to be eligible for a mortgage, talk to your real estate agent or financial advisor. For more information about the mortgage process, check out Loans Canada!      

Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and traveling the world in search of the coolest sights our planet has to offer. Bryan uses the BMO Cash Back Mastercard to earn cash back on everything from boring bill payments to exciting excursions. He is also a strong saver, holding both a TFSA and an RRSP account in order to prepare for his future while taking full advantage of tax benefits.

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