Down payment to buy a home
A down payment is often what buyers think is the total of all costs when buying a home. This is a very common misconception. The down payment for a home will vary depending on the buyer’s qualifications and price range. Save as much as you can for your down payment. The bigger the down payment, the smaller the mortgage, which can save you thousands of dollars in interest charges.
Minimum down payment requirements:
$500,000 or less requires a deposit of 5% of the purchase price.
$500,000 to $999,999 requires a deposit of 5% on the first $500,000 and 10% for the portion of the purchase price above $500,000
$1 million or more requires a deposit of 20% of the purchase price.
Here are a few ways you can save for a down payment:
- Savings. Buyers often save regularly for years by reducing expenses, taking a second job, or getting a smaller apartment if they are renting. Make your plan and start as soon as possible!
- Gift. If you would accept a gift, you’ll need to get it clearly in writing that the person making the gift has no financial interest in or obligation toward the property. A bank will not accept it if your gift is really a loan.
- Special programs*. Provincial and local governments offer down payment assistance to homebuyers. Many nonprofit organizations also offer down payment assistance.