-Yes, Here’s How! Many Canadians assume they need a 20% down payment before they can buy a house. If you don’t have a 20% down payment, it can feel like homeownership is out of reach. In reality, eligible buyers can purchase with much less. The minimum starts at 5%, though the amount depends on the home’s price. A smaller upfront investment comes with trade-offs. You will usually need mortgage loan insurance, and your monthly payment may be higher. Still, opting for a low down payment can be a practical option if you understand the rules, qualify for a mortgage, and leave enough room in your budget for closing costs and homeownership expenses. Key Takeaways The minimum down payment is 5% on the first $500,000 and 10% on the portion above $500,000 for eligible homes priced below $1.5 million. Mortgage loan insurance is usually required when your down payment is below 20%. The premium is generally added to your mortgage. First-time buyers may combine the First Home Savings Account and the Home Buyers’ Plan to build their down payment. First-time buyers and buyers of new builds may qualify for a 30-year insured mortgage amortization. The 20% Down Payment Myth The Real Minimum Is Tiered Canada’s minimum down payment depends on the purchase price. For a home priced at $500,000 or less, the minimum is 5%. For a home priced above $500,000 and below $1.5 million, buyers need 5% on the first $500,000 and 10% on the remaining amount. Homes priced at $1.5 million or more require at least 20% down and do not qualify for mortgage loan insurance. For example, on a $600,000 home, the minimum down payment is $35,000: 5% of the first $500,000, or $25,000, plus 10% of the remaining $100,000, or $10,000. On a $400,000 home, the minimum is $20,000. Why 20% Still Matters A 20% down payment removes the need for mortgage loan insurance. It can also lower your mortgage balance and monthly payment. It is not the minimum amount needed to buy a home. At REMAX, we often see buyers delay their search because they view 20% as a requirement rather than one option among several. A larger down payment can provide more flexibility, but reaching that milestone may also mean waiting longer, changing neighbourhood preferences, or competing for different properties later. The right approach depends on your financial position, housing needs, and the opportunities available in your local market. What Lenders Look At Your down payment is only one part of mortgage approval. Lenders also review your income, credit history, existing debts, employment situation, and ability to pass the mortgage stress test. Self-employed buyers, buyers with weaker credit, or buyers using non-traditional down payment sources may face extra documentation requirements or need a larger down payment. Mortgage Loan Insurance and Your Costs What Mortgage Loan Insurance Does If you buy with less than 20% down, your lender will usually require mortgage loan insurance. This coverage protects the lender if you stop making mortgage payments. It does not cover missed payments, job loss, or a decline in your home’s value. The premium depends on your down payment percentage and mortgage terms. It is usually added to your mortgage rather than paid in cash at closing. Provincial sales tax on the premium may still be payable at closing in Ontario, Quebec, and Manitoba. 10% vs. 20% Down Payment Compared A 10% down payment means borrowing more and paying a mortgage loan insurance premium. A 20% down payment avoids the premium and reduces the amount you finance. Compare the monthly payment, total interest over your amortization, insurance premium, closing costs, and the time it would take to save the larger down payment. When Paying the Premium May Make Sense Mortgage loan insurance can help buyers enter the market sooner. This may suit someone with stable income, manageable debt, emergency savings, and a home they expect to own for several years. It may be less suitable if the purchase would leave you with little cash after closing or a payment that feels difficult to manage. Buying sooner does not guarantee price growth, so the decision should still work if home values remain flat or decline. Saving for a Down Payment Start With the First Home Savings Account The First Home Savings Account allows eligible Canadians to contribute up to $8,000 each year, to a lifetime limit of $40,000. Contributions may reduce your taxable income, and qualifying withdrawals for a first home are tax-free. A couple where both buyers qualify could save up to $80,000 through FHSAs. Unused funds can generally be transferred to an RRSP without affecting RRSP contribution room. Add the Home Buyers’ Plan The Home Buyers’ Plan allows eligible buyers to withdraw up to $60,000 from their RRSP to buy or build a qualifying home. The withdrawal is not taxed if you meet the rules and repay it over the required period. A buyer who has fully used both programs could access up to $100,000. A qualifying couple could access up to $200,000. The amount available depends on their savings, contribution room, and eligibility. Check New-Build and Local Tax Rebates Eligible first-time buyers of a newly built or substantially renovated home may qualify for a federal GST/HST rebate of up to $50,000. The full rebate applies to homes valued at $1 million or less. A partial rebate may apply to homes priced between $1 million and $1.5 million, based on the applicable eligibility rules and rebate calculation. Land transfer tax rebates may also be available in Ontario, British Columbia, Prince Edward Island, and Toronto. The rules, amounts, and eligibility requirements vary by location. Consider a 30-Year Amortization First-time buyers purchasing a newly built home may qualify for a 30 year amortization on an insured mortgage. A longer amortization can lower your monthly payment and may help you qualify for a larger mortgage. It also means paying interest for longer. Review the total borrowing cost before choosing this option. What a Low-Down-Payment Purchase Looks Like in Practice Budget Beyond the Down Payment The down payment is only one part of your upfront cost. You may also need money for legal fees, land transfer tax, an inspection, moving costs, property insurance, adjustments, and applicable taxes on your mortgage loan insurance premium. Many buyers budget roughly 1.5% to 4% of the purchase price for closing costs, though the total varies by province, municipality, property type, and available rebates. Keep an emergency fund after closing rather than using every dollar for the purchase. Build Equity from a Smaller Starting Point With a 5% or 10% down payment, you begin with less equity in the home. Each mortgage payment can still build equity because part of the payment goes toward principal. This approach tends to suit buyers who plan to own the home for several years. A longer time horizon can give you more room to manage market changes, selling costs, and the early years of mortgage payments. Frequently Asked Questions When is it smarter to wait and save 20%? Waiting may make sense if a major life change could affect your income or expenses within the next few years. This may include parental leave, a career change, caring for a family member, or plans to return to school. A larger down payment can reduce your monthly mortgage payment and leave more room for these changes. The type of home also matters. Buying with less than 20% down may feel more manageable when you don’t have 20% down payment and the property has predictable costs, such as a newer condo with a healthy reserve fund. An older detached home with an aging roof, furnace, plumbing, or foundation may require more cash after closing than a smaller down payment leaves available. Can my down payment be gifted? In many cases, lenders accept a non-repayable gift from an immediate family member as part or all of your down payment. You will usually need a signed gift letter, proof that the funds were transferred, and bank statements showing where the money came from. Lenders may also want the gift deposited before closing so they can review the paper trail. A gift can help you buy a house sooner, but it does not replace mortgage qualification. You still need to meet income, credit, debt-service, and stress-test requirements. You should also have enough money for closing costs, moving expenses, and a financial buffer after you get the keys. Does mortgage loan insurance protect me if I cannot make payments? No. Mortgage loan insurance protects the lender if you default, not you. It does not cover your payments if you lose your job, become ill, or face another financial setback. Before you buy a house, consider how long you could cover the mortgage and essential bills with your savings, and avoid taking on a payment that leaves no room for repairs, rising costs, or a change in income. An emergency fund and appropriate disability or life insurance can provide more direct protection.

Following a slow start shaped by a prolonged winter and lingering economic unease, Canada’s spring housing market began to find its footing in May, with momentum carrying into June. Buyers who had been sitting on the sidelines began to re-engage, encouraged by stabilizing borrowing costs and a healthy supply of inventory in many markets. While activity remains below typical seasonal levels in some regions, the late-spring pickup has set a more optimistic tone for the second half of the year, and positioned the market for a stronger fall. According to the Royal LePage® House Price Survey and Market Forecast, the aggregate1 price of a home in Canada decreased 1.4% year over year to $814,900 in the second quarter of 2026. On a quarter-over-quarter basis, however, the national aggregate home price remained flat, increasing a modest 0.2%. “After a sluggish first quarter, the spring housing market finally got rolling in May. Several regions are now seeing that uptick in momentum carry into summer, as buyers who held back earlier in the year re-enter the market,” said Phil Soper, president and CEO, Royal LePage. “In many cases, what has kept consumers on the sidelines is not a lack of interest, but a lack of urgency. In markets where inventory levels remain elevated, homebuyers have the luxury of time, browsing at their own pace until the right property comes along. That measured approach is reinforced by a persistent backdrop of economic uncertainty, which continues to shape how and when many Canadians decide to move.” In May, Canada’s Consumer Price Index (CPI) rose 3.2% year over year, up from 2.8% in April,2 the highest reading since January 2024. The acceleration has been largely driven by rising energy prices, which continue to reflect the impact of hostilities in the Middle East. Bank of Canada Governor Tiff Macklem indicated in June, however, that inflationary pressures have not spread broadly in a way that would signal a wider rise in general inflation.3 The Bank of Canada’s key lending rate remains at 2.25%, untouched since October 2025.   “Should rising inflation become more widespread, the Bank may be compelled to raise rates again,” said Soper. “What our regional experts tell us, however, is that a modest rate increase is unlikely to set off alarm bells. This is not the post-pandemic era, when steep and rapid rate surges sent shock waves through the market. Today’s buyers are thinking strategically, weighing broader risks to their employment and the economy, rather than reacting to incremental rate moves.” Most and least expensive cities see narrowing price gap The Royal LePage National House Price Composite is compiled from proprietary property data nationally and regionally in 65 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home decreased 0.9% year over year to $862,400, while the median price of a condominium decreased 2.9% to $574,800. On a quarter-over-quarter basis, the median price of a single-family detached home increased modestly by 0.6%, while the median price of a condominium decreased 0.5%. Price data, which includes both resale and new build, is provided by RPS Real Property Solutions, a leading Canadian real estate valuation company. In the second quarter, the aggregate price of a home decreased 4.5% year over year in Greater Vancouver and declined 4.6% in the Greater Toronto Area (GTA), although prices in the GTA have been inching upward on a monthly basis since the start of the year. Elsewhere in the country, limited supply has kept upward pressure on home prices. “The price gap between Canada’s most expensive and most affordable markets continues to narrow. Softening home prices in our largest and most costly cities are making these markets more accessible, opening the door for buyers who may have previously been priced out. Meanwhile, secondary markets that did not experience drastic pandemic price increases followed by sharp declines, have continued to record steady home price gains,” added Soper. “For newcomers to Canada and first-time buyers already living in British Columbia’s lower mainland and Ontario’s Greater Golden Horseshoe, the calculus is shifting. Looking ahead, this could translate into less interprovincial migration than we have become accustomed to this decade.” Pandemic-era mortgage renewal wave nears its end Canadian mortgage holders are approaching the end of a multi-year renewal cycle rooted in ultra-low pandemic-era rates. Over the next year, the last of the five-year, fixed-rate mortgages taken out during the pandemic will come up for renewal, representing approximately 12% of all outstanding mortgages, according to the Bank of Canada.4 On average, these borrowers can expect their monthly payments to increase by 15%. “The over-blown pandemic mortgage renewal scare is all but over and most Canadians have weathered the storm. By the middle of next year, virtually all borrowers facing significant payment increases will have renewed. While most will be able to manage the adjustment, a small subset of homeowners face a more challenging road, particularly in higher-priced markets where home prices have taken a more sustainable dip in recent years,” said Soper.  “That said, the numbers remain small enough that we do not expect a meaningful impact on the broader housing economy. National mortgage delinquency rates remain low by historical standards, meaning that most borrowers have been able to absorb higher payments without falling behind and have been able to successfully refinance. Rising incomes and a resilient labour market continue to work in homeowners’ favour. And, strict mortgage stress test rules mean borrowers would have qualified at a much higher rate than they actually paid when they took out those mortgages.” As of the fourth quarter of 2025, the national mortgage delinquency rate in Canada is 0.24%.5 Second quarter press release highlights: The aggregate price of a home in the Greater Montreal Area increased 4.9% year over year to $650,500 in the second quarter of 2026. Quebec City’s record performance begins to cool; region posts quarter-over-quarter price decline for the first time in more than three years.  Royal LePage is forecasting that the aggregate price of a home in Canada will increase 2.0% in the fourth quarter of 2026, compared to the same quarter last year.  

Canada’s housing market showed further signs of recovery in June, with national home sales rising for a third consecutive month and home prices holding steady after more than a year of declines, according to the latest data from the Canadian Real Estate Association (CREA). Home sales continued to climb, while new listings fall National home sales edged up 0.5% from May to June. The increase builds on a 5.5% jump in May and a 0.9% gain in April, placing activity roughly 7% above where it stood in March. The recovery has been led by Ontario, with a more muted increase in British Columbia and mixed results across other parts of the country. “June’s housing numbers continued to build momentum following the late start to the year in May, with virtually every metric moving in the right direction,” said Shaun Cathcart, CREA’s Senior Economist, in the monthly report. “Looking ahead, fixed mortgage rates have eased from their peak in April, and rate hikes from the Bank of Canada this year are much less likely than they were just a month ago. This is good news for borrowers. Additionally, home prices are no longer falling in most of the markets where they were previously, which had likely been keeping a lot of buyers waiting on the sidelines. As such, we continue to expect the second half of the year to be quite a bit more active than the first half, similar to sales activity in 2024 and 2025.” The number of newly listed homes fell 1.3% from May to June, marking a second consecutive monthly decline. Combined with the rise in sales, the national sales-to-new listings ratio tightened to 50.2%, up from 49.3% in May. It was the first time this year the measure climbed back above the 50% mark. Readings between 45% and 65% are generally consistent with balanced housing market conditions, with the long-term average sitting at 54.8%. There were 208,578 properties listed for sale across Canadian MLS® Systems at the end of June, up just 0.6% from a year earlier and slightly above the long-term average for this time of year. Nationally, there were 4.8 months of inventory, unchanged from May and the lowest level so far in 2026. Home prices held steady The National Composite MLS® Home Price Index was flat from May to June, the first time the measure has not declined on a month-over-month basis since January 2025. Compared to a year earlier, the index was down 3.6%, the smallest annual decline since last October. Prices remain lower year over year in British Columbia, Alberta and Ontario, though those declines continue to shrink as prices stabilize. Nova Scotia posted its first annual price decline in more than three years as that market cools. The national average home price was $696,078 in June, up 0.5% from the same month last year. “The last couple of months have seen the return of more certainty around both interest rates and home values, along with an increasing number of buyers in the market,” said Garry Bhaura, CREA Chair. “We may see a brief pause in that trend as Canadians enjoy their summer, but the stage is set for a busier fall market. That usually comes to life after Labour Day, which gives buyers and sellers a bit of time to do their research, make a plan, and get homes ready to list.” CREA updated its forecast for 2026 and 2027 Alongside the June data, CREA revised its outlook for home sales and prices through 2027. Fixed mortgage rates jumped in late March amid inflation concerns tied to high oil prices, but have since partially eased. Rate hikes by the Bank of Canada this year have largely been taken off the table, positive news for both fixed- and variable-rate borrowers. Some 463,336 residential properties are forecast to change hands in 2026, a 1.4% decline from 2025. The slight downward revision reflects a weak first half of the year and a faster-than-expected slowdown in regions facing reduced population growth and long-standing supply shortages, notably Quebec and the East Coast. Ontario is now the only province forecast to see annual sales increase in 2026. A more active second half of the year is still expected, similar to the pattern that played out in 2024 and 2025. The national average home price is forecast to rise 1.1% to $686,710 in 2026. Alberta stands out on the price side, with values resuming their climb in the second quarter, while Newfoundland and Labrador remains the country’s last province in full seller’s market territory. In 2027, national home sales are forecast to climb 3.7% to 480,567 units, supported by slow but positive economic growth, stable interest rates and steady or modestly rising home prices in most regions. The national average home price is forecast to reach $694,164, marking the sixth and seventh consecutive years the measure has hovered near the $700,000 mark.

In its fifth scheduled announcement of 2026, the Bank of Canada held the target for the overnight lending rate at 2.25%. This marks the sixth consecutive hold to interest rates since October of last year. Canada’s economy is turning a corner. After a stretch of sluggish growth and stubborn price pressures, inflation is projected to ease gradually from its recent spike. However, the path forward is not without obstacles. The war in the Middle East and shifting U.S. trade policy continues to cast uncertainty over the outlook. Still, for Canadians watching from the sidelines, including those with home buying or selling plans on hold, the improving fundamentals offer cautious optimism. “Recent indicators point to continued solid consumer spending. Housing activity, which has been weak, looks to be stabilizing. Export growth has resumed and is expected to continue to strengthen, albeit along a lower path. Business investment is picking up, boosted in the near term by the oil and gas sector. Although the Canada-US-Mexico Agreement is now subject to annual reviews, more businesses report they are finding ways to navigate through the uncertainty. Government spending also contributes to higher economic activity over the projection,” said Tiff Macklem, Governor of the Bank of Canada, in a press conference with reporters following the announcement. “Overall, our growth outlook is similar to our April forecast, but the data we have received since April have increased our confidence that the economy is indeed working its way through this period of global upheaval.” In May, the Consumer Price Index (CPI) rose 3.2% year over year, up from 2.8% in April and the highest reading since January 2024. Gas prices, driven sharply higher by conflict in the Middle East, were the largest contributor to the increase. However, economists note that these inflationary pressures have been largely contained to energy and have not spread broadly to goods and services, an encouraging sign that underlying inflation remains in check. While near-term inflation expectations tend to move with prices at the pump, longer-term expectations remain well anchored, giving the Bank of Canada room to hold its course. Meanwhile, the labour market has shown similar strength, with the unemployment rate dipping to 6.5% in June. GDP growth is expected to improve, with growth projected to 2.5% in Q2 2026.  Rates stable as pandemic-era mortgage renewal wave nears end With the overnight rate holding steady, Canadians obtaining or renewing a mortgage can count on another few months of certainty, a welcome reprieve for those coming off ultra-low rates. Over the next year, the final wave of five-year, fixed-rate mortgages secured during the pandemic will come up for renewal, accounting for roughly 12% of all outstanding mortgages, according to the Bank of Canada.1 On average, these borrowers can expect monthly payments to rise by 15%. “The over-blown pandemic mortgage renewal scare is all but over and most Canadians have weathered the storm. By the middle of next year, virtually all borrowers facing significant payment increases will have renewed. While most will be able to manage the adjustment, a small subset of homeowners face a more challenging road, particularly in higher-priced markets where home prices have taken a more sustainable dip in recent years,” said Phil Soper, president and CEO, Royal LePage.® “That said, the numbers remain small enough that we do not expect a meaningful impact on the broader housing economy. National mortgage delinquency rates remain low by historical standards, meaning that most borrowers have been able to absorb higher payments without falling behind and have been able to successfully refinance. Rising incomes and a resilient labour market continue to work in homeowners’ favour. And, strict mortgage stress test rules mean borrowers would have qualified at a much higher rate than they actually paid when they took out those mortgages.” According to the Royal LePage House Price Survey and Market Forecast, the aggregate2 price of a home in Canada decreased 1.4% year over year to $814,900 in the second quarter of 2026. On a quarter-over-quarter basis, however, the national aggregate home price remained flat, increasing a modest 0.2%. The Bank of Canada will make its next interest rate announcement on September 2nd, 2026. Read the full July 15th report here. Want to know more about how the overnight lending rate works? Read our explainer on how the Bank of Canada uses this financial tool.

  In August, national home sales dropped 24.7% yearly, but just 1% month over month which was the smallest decline in 6 months.  Along with steady month over month sales, demand/supply conditions were also stable in many markets.  This could be an early sign that the sharp adjustment in Canadian housing markets is coming to an end.  Due to low sales in previous months, the number of newly listed homes was down 5.4% in August.  The sales to new listings ratio rose month over month to 54.5%, when the long term average is 55.1% Contact us for any real estate needs and a low 1% listing fee if just listing your home or only 0.5% if also buying a home with us.   Michael Gallant 905-442-8009 / soldbymike@rogers.com