The New Reality of Down Payments in Canada

The New Reality of Down Payments in Canada (It’s Not What You Think)

Most people believe:

“I need 20% down to buy a home.”

That’s not always true — and sometimes not even the best option.

Minimum Down Payment Basics (Canada)

• 5% on the first $500,000

• 10% on the portion above $500,000 up to $1M

• 20% if the home is over $1M

But that’s just the starting point.

The Hidden Costs People Forget

Even with a low down payment, you need money for:

• Land transfer tax

• Legal fees

• Home inspection

• Moving costs

• Adjustments and closing fees

Many buyers get approved — then feel shocked at closing.

Is 20% Always Better?

Not always.

Sometimes:

• Keeping cash for emergencies is smarter

• Investing elsewhere makes more sense

• Paying CMHC insurance allows better rates

It depends on your situation.

Creative (But Legal) Down Payment Options

Some Canadians use:

• Gifted down payments

• RRSP Home Buyers’ Plan

• Equity from another property

• Borrowed funds (with proper structure)

How a Broker Guides This

A broker helps:

• Structure down payment sources correctly

• Avoid last‑minute lender issues

• Match your cash flow with your life goals

Simple Takeaway

The “right” down payment isn’t a number — it’s a strategy.