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Guide: Down Payment Assistance Programs in Canada

The down payment is an essential part of purchasing a home and obtaining an approval for a mortgage loan. A down payment is the amount of money you are going to put towards the purchase of a home, see Table 1.

Saving for a down payment can be a challenge for potential homeowners, the good news is that there are various down payment assistance programs available to Canadian homeowners like:

The information below will help inform you about the various programs and initiatives that are available to you.

A detailed guide on the various down payment assistance programs available to Canadians. Also includes information on how to qualify for these programs.

How can I qualify for down payment assistance programs in Canada

There are various requirements that current or potential homeowners must meet to qualify for a down payment assistance programs in Canada but note that all programs are for primary residences only.

These programs are curated specifically to help the average Canadian or Canadian family afford their own home, these are some of the requirements that will have to be met:

First-Time Home Buyers Incentive

  • 5% (existing home or new mobile/manufactured home) or 10% (New Construction) of the home’s purchase price to put towards the down payment. (On top of your minimum 5%)
  • Qualifying Annual Income of $120,000* or less with a total maximum borrowing amount of 4 times the qualifying income,
    • *Qualifying Annual Income of $150,000 or less in Toronto, Vancouver or Victoria census areas with a total maximum borrowing amount of 4.5 times the qualifying income.
  • Must be a legal resident of Canada
  • Intend to use home as a primary residence
  • Repayment is permitted anytime without penalties up to a maximum of 25 years or when the property is sold, whichever comes first. Note: some first mortgage holders may require a repayment in the event of a refinance of their first mortgage.

RRSP Home Buyers Plan

  • First-time home buyers can withdraw up to $35,000 from your RRSP without incurring withholding tax at the source
  • Must be a Canadian citizen or permanent resident
  • Must be requested with CRA Form T1036 when redeeming RRSP’s
  • Repayment must start within 2 years after the purchase date
  • Repayment must complete by 15 years after the purchase

Land Transfer Tax Rebate

  • British Columbia – first-time purchasers of homes $500,000 or less $0 transfer tax will be required, a prorated amount up to $525,000 for exemptions.
  • Ontario – no land transfer tax for first-time purchasers on the first $368,000, for home over this amount the maximum refund is $4,000.
  • Prince Edward Island – the criteria can be found on the PEI website for exemptions.

First-Time Home Buyer’s Tax Credit (HBTC)

  • You can claim up to $10,000 on your tax return to receive up to a $1,500 tax credit
  • You can check out further details by clicking here.

It is important to note that each province may have different rules and specifications regarding these assistance programs so talk to a mortgage broker to get the most up to date information.

How much do you need for a down payment in Canada?

When consulting with their lenders, Canadian homeowners often ask “how much for a down payment on a house”? The minimum amount you’ll require for a down payment depends on the purchase price of your home. Note, if your down payment is less than 20% of the purchase price of the home then you will have to purchase mortgage loan insurance, this insurance will be arranged for you by your mortgage broker.

In Canada, here are the minimum down payment requirements to purchase a home:

Purchase price of the home Minimum required down payment
$500,000 or less 5% of the purchase price
$500,000 up to $999,999 5% of the first $500,000, plus
10% of the portion above $500,000
$1,000,000 or more 20% of the purchase price

How to save for a down payment on a house in Canada

This is a common question asked by most potential homeowners in Canada. Saving for a down payment takes planning and the great news is that it’s far from impossible. Here are a few tips on how to save for a down payment in Canada.

  • Follow a budget – Write down your monthly income then list your monthly expenses. Based on these values subtract the expenses from the income and try and gauge where you have room to cut costs then set up a separate bank account for your future down payment and direct these new found funds there every month.
  • Pay off debt – If you have any other outstanding sources of debt like a credit card, a car loan or even a student loan it would be wise to pay off these amounts. However, ensure you do this in a systematic manner and only pay off what you can afford. Paying off higher interest debt obligations first can free up extra cash flow to pay down other debt faster and ultimately start to save for your down payment.
  • Look for a roommate – If you’re renting a 1 bedroom unit by yourself, it might make more sense to look for a two bedroom apartment and split the cost with a roommate. A two bedroom apartment is not likely to cost that much more than a one-bedroom and by sharing the burden of rent with another person you will save a lot more in the long run.
  • Look for a co-purchaser – Just like having a roommate when you are renting, two or more of people may be able to pool their savings for a down payment sooner allowing you to get into homeownership faster than you expected. You can also typically make higher mortgage payments or extra payments against the mortgage to free up equity sooner to ultimately purchase your own homes down the road.

Is it a good idea to borrow money for down payment on a house?

You may not have enough funds readily available for a down payment. In such situations, it might make sense to contact a mortgage broker and ask about the possibility of securing a loan for a down payment, but often gifted funds from family is the best source of additional down payment money. Borrowing money for a down payment advantages and disadvantages.


  • Smaller Payments – Now that you have enough money for a down payment you’ll be able to qualify for a lower interest rate which will mean smaller mortgage payments per month and a more flexible payment plan.
  • Won’t require Mortgage Default Insurance – If you’re able to borrow enough to afford a down payment of 20% or more, you won’t need to buy mortgage default insurance. Further reducing the costs associated with your mortgage.


  • More Debt Sources – Taking out a loan to finance your down payment is an added source of debt that will also have to be included in the debt servicing to qualify for the loan and you will have to pay back. Additionally, if you’re financial situation isn’t that great lenders may charge you a higher interest rate and fees.
  • Can impact your Total Debt Service (TDS) Ratio – Your debt service ratio is essentially the percentage of income needed to pay your housing costs and other debts like car payments and credit cards. If you apply for a mortgage with a high total debt service ratio you may not be eligible as you’ll be considered a high risk client.  Furthermore, the loan for the down payment will be considered an additional debt service obligation.

How Mortgage Maestro can help

Once you have obtained your down payment, Mortgage Maestro is an excellent option to help you access a variety of lenders in order to find the best mortgage solution for you. We have access to an extensive network lenders with best market rates and terms. Our team can do all the research and due diligence for you, making sure to find you the best possible mortgage solution given your financial situation.

Contact us today and we’ll have an experienced mortgage professional reach out immediately.

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