Understand minimum down payments, mortgage insurance, savings accounts, gift funds, and programs that help you buy sooner.
In Canada, the minimum down payment depends on the purchase price.
A larger down payment lowers your mortgage amount, monthly payments, and CMHC insurance costs. In Saskatchewan, you also save because there is no provincial land transfer tax.
Beyond regular savings, Canadian buyers can use several sources to reach their goal faster.
Combining these sources can put homeownership within reach years sooner.
Here is how each down payment source works.
Compare the rules, costs, and requirements for common down payment sources.
5% on the first $500,000, 10% on the next $499,999, and 20% on $1 million-plus homes. A smaller down payment means a larger mortgage and CMHC premiums.
Required when your down payment is under 20%. The premium is added to your mortgage and protects the lender if you default.
Family gifts, FHSA savings, RRSP withdrawals, and TFSA funds are all commonly accepted. Your lender will ask for proof of source.
Your down payment is only part of the cash you need at closing. Plan for these additional costs:
Budgeting 1.5% to 4% of the purchase price for closing costs helps avoid surprises. Saskatchewan buyers benefit from no land transfer tax, keeping this total lower than in many provinces.
What is the minimum down payment for a first-time buyer in Canada?
You need 5% on the first $500,000, 10% on the portion between $500,000 and $999,999, and 20% on any home priced at $1 million or more.
Can I use gifted money for a down payment?
Yes. Most lenders accept gifts from immediate family. You will need a signed gift letter confirming the money does not need to be repaid.
Should I use the FHSA or the Home Buyers' Plan?
You can use both. The FHSA gives tax-free growth and withdrawals, while the HBP lets you borrow from your RRSP and repay it over 15 years.
Do I need mortgage insurance with a 10% down payment?
Yes. Any down payment below 20% requires CMHC or equivalent mortgage default insurance. The premium is usually added to your mortgage.
How much should I save for closing costs?
Plan for 1.5% to 4% of the purchase price. In Saskatchewan, the total is often lower because there is no land transfer tax.
Can I use my TFSA for a down payment?
Yes. TFSA withdrawals are tax-free and can be used for any purpose, including your down payment.
Contact a Century 21 Fusion agent. We will help you compare homes, understand your buying power, and connect you with trusted mortgage specialists.
