10% vs 20% Down Payment: Which Can Actually Make You Richer?

Most homebuyers in Canada assume that if they can afford a 20% down payment, they should always take that option. The logic sounds simple. Avoid mortgage default insurance, borrow less money, pay less interest, and have a smaller monthly payment. But the math is not always that straightforward. In this video we break down a real example of buying an $800,000 home in Vancouver and compare two scenarios: putting 10% down with CMHC insurance versus putting 20% down without insurance. While the 20% option lowers your monthly payment and avoids the insurance premium, the 10% option allows you to keep more capital invested elsewhere. The key idea is opportunity cost. If you put 20% down, you tie up an extra $80,000 in your home. If you put 10% down, you keep that $80,000 available to invest. Over long periods of time, the growth of invested capital can sometimes outweigh the extra interest and insurance costs on a larger mortgage. In our example, the 10% down mortgage carries a CMHC premium of about $24,800 and results in roughly $80,000 more in total costs over 30 years compared to the 20% down option. However, if the $80,000 saved on the down payment is invested and grows at 6% annually, that investment could grow to roughly $460,000 over 30 years. That means even after accounting for the extra mortgage costs, the investor could still come out ahead financially. This does not mean 10% down is always better. It depends on discipline, long term investment strategy, and personal risk tolerance. But it shows why the decision between 10% vs 20% down payment should not be treated as a simple rule. We break down: • Why many buyers automatically choose 20% down • How CMHC insurance changes mortgage rates • The true cost of mortgage insurance over time • Why opportunity cost matters when choosing your down payment • How investing the difference can change the long term math TIMESTAMPS: 0:09 – The 10% vs 20% Down Payment Debate Everyone Gets Wrong 0:50 – $800K Example: Breaking Down 10% vs 20% 1:25 – CMHC Insurance vs Lower Rates Explained 3:00 – Monthly Payment Difference: Is 20% Actually Better? 3:43 – The 30-Year Cost Breakdown (The $80K Difference) 5:02 – Investing the Difference: The $460K Opportunity 6:13 – Final Verdict: When 10% Down Can Be Smarter If you are deciding between 10% or 20% down, the most important step is understanding the full financial picture. Mortgage costs, investment returns, and personal risk tolerance all play a role. Paul Davidescu (https://www.levelupmortgages.com/) Level Up Mortgages 📞 604-809-3188 📧 paul@levelupmortgages.com See Our Google Reviews in BC & Ontario: https://bit.ly/ViewLUMReviews ⭐⭐⭐⭐⭐ Got Mortgage Questions? We've got you covered: First-Time Buyers Manual: https://bit.ly/FTHBGuides Mortgage FAQ: https://bit.ly/mortgagefaq Email: paul@levelupmortgages.com Website: www.levelupmortgages.com Connect with us on social media: 📷 Instagram: @levelupyourmortgages 👔 LinkedIn: @pauldavidescu 🐦 Twitter: @levelupmortgage 🎥 TikTok: @levelupmortgages 📖 Blog: https://www.levelupmortgages.com/blog Subscribe to Level Up Mortgages on YouTube: http://bit.ly/LevelUpYouTubeSubscribe #DownPaymentCanada #MortgageCanada #CMHCInsurance #MortgageStrategy #FirstTimeHomeBuyerCanada #InvestTheDifference #PersonalFinanceCanada #CanadianRealEstate