When purchasing your first home, a new home, or an investment property like a vacation or rental home, lenders require you to contribute some of your own money toward the purchase, are known as a down payments.
A down payment provides you with initial equity in the property and demonstrates to the lender your financial commitment to the purchase and the accompanying mortgage loan.
Saving for a down payment is one of the biggest challenges for prospective homebuyers, but it can come from multiple sources.
Lenders will verify the origin of your down payment and how long the funds have been accessible, often requiring a 90-day transaction history. To streamline the process, keep your funds in one savings account and limit transfers during this period.
According to the 2021 First-Time Homebuyer Survey & Financial Fitness Study conducted by Sagen, the most common source of down payments for homebuyers was personal savings, followed by funds from their RRSP using the Home Buyers Plan.
The RRSP Home Buyers' Plan (HBP) is designed to help first-time homebuyers purchase a home by allowing them to withdraw money from their RRSP, without having to pay tax on the withdrawal—at least not immediately.
The Home Buyers' Tax Credit (HBTC) is a non-refundable tax credit available to first-time homebuyers. It's designed to help ease the costs associated with purchasing a home by offering a financial break at tax time.
A First Home Savings Account (FHSA) is a type of registered savings account designed to help first-time homebuyers save for their first home in a tax-advantaged way.
The minimum down payment needed to purchase property in Canada is determined by several key factors, from the Purchase Price to the borrowers Residency Status.
This calculator is for illustrative purposes only. Users should not rely on this calculator to make any financial decisions. Keep in mind that small differences in payment and savings estimates may occur due to variations in calculation methods used by different lenders. While every effort is made to keep this tool up-to-date, M Factory does not guarantee the accuracy, reliability or completeness of any information or calculations provided by this calculator. M Factory is not liable for loss or damage of any kind arising from the use of this tool.
It’s the amount of money you put toward the purchase price of your home upfront. The rest is covered by your mortgage.
Homes under $500,000 → minimum 5%
Homes $500,000 – $999,999 → 5% on the first $500,000 + 10% on the rest
Homes $1,000,000+ → minimum 20%
Rental/investment properties → usually 20%+
You’ll need mortgage insurance (through CMHC, Sagen, or Canada Guaranty). This protects the lender, but it lets you buy with as little as 5% down.
Yes! With the Home Buyers’ Plan, you can withdraw up to $60,000 tax-free from your RRSP to buy your first home. You’ll need to pay it back over 15 years.
In most cases, lenders want to see that your down payment comes from your own savings or a gift from family. However, some programs do allow borrowed down payments (from a line of credit, loan, or credit card) if you have strong income and credit. The borrowed funds must be factored into your debt ratios, so this option is less common today.
Yes — but with conditions. Canadian lenders do not accept cryptocurrency directly. To use crypto for your down payment, you must sell it and deposit the proceeds into your bank account, showing a clear paper trail of the transaction. Lenders require proof that the funds are legitimate, sourced from your crypto investments, and comply with anti–money laundering rules.
The First Home Savings Account (FHSA) is a game changer. You can save up to $40,000 tax-free for your first home, and your withdrawals are also tax-free. Think of it as a TFSA + RRSP combined, designed specifically for homebuyers.
Yes. Many buyers get help from family. Lenders require a gift letter confirming it’s not a loan.
Yes. If you’re buying a home from a family member, they can sell it to you below market value and gift you the difference as equity. For example, if the home is worth $500,000 and they sell it for $450,000, the $50,000 discount counts as your down payment. Lenders will require:
An appraisal to confirm market value
A signed gift of equity letter from the seller
This strategy can help buyers enter the market without needing as much cash upfront.
Smaller down payment = easier to buy sooner, but higher monthly payments.
Bigger down payment = lower payments, no insurance, more equity from day one.
Absolutely! Many buyers mix:
FHSA savings
RRSP Home Buyers’ Plan
Gifts from family
This makes it easier to reach a stronger down payment.
Yes. Closing costs (like legal fees, land transfer tax, and inspections) are separate. Budget about 1.5–4% of the purchase price in addition to your down payment.
Start saving early in an FHSA or RRSP.
Try to aim for 20% if possible, but don’t let that stop you from getting into the market sooner.
Work with a mortgage broker who can show you how to structure your down payment and mortgage for both short-term affordability and long-term savings.
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