The down payment is one of the most critical elements of financing your home. Before you begin applying for your mortgage you need to have saved sufficiently for this initial expenditure on your home.
The first step is determining what you can afford to spend on your home. Calculate what total monthly payments you are able to make (mortgage payments, maintenance fees, heat, hydro, taxes). Use this to determine the cost of the home you can afford to purchase.
Next you need to determine how much you are required to put down on your future home. The required down payment is different for homes of different values. For homes less than $500,000, a minimum of 5% of the value is required. For homes between $500,000 and $1 million 10% is required. If your home costs over $1 million, or if you want to avoid paying the mandatory Canada Mortgage and Housing Corporation (CMHC) mortgage insurance, you will need to put down 20% of the value of your home. Mortgage insurance is lender (bank) protection against borrower default (you not being able to pay back your loan). See CMHC for more detailed consideration of insurance.
Remember that the more money you put down on your home when you purchase it, the less money you will need to pay back on your mortgage (with interest!). The more money you can put down up front, the better off you will be in the long run.