-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. 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.

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.

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.

You do not need a 20% down payment to buy a house.

Contact us today to discuss your next home purchase.

Where the real estate market is concerned, Mr. Wonderful has been stirring the pot for quite some time, urging young professionals not to rush into home buying.

The Mr. Wonderful moniker is well known to be tongue-in-cheek. It was originally a sarcastic jab that Canadian multimillionaire entrepreneur Kevin O’Leary leaned into after it was flung at him by fellow panelist Barbara Corcoran on the American business reality television series Shark Tank, where O’Leary quickly became the resident villain.

He had a similar reputation before that on Dragons’ Den, the show’s Canadian equivalent.

Due to his often brutally blunt critiques and strict focus on the bottom line, O’Leary tends to be highly polarizing. He’s drawn scrutiny for some of his public statements. Among these is his advice that young people should avoid entering the real estate market until they marry, start a family and need long-term stability. He recommends that until then, they rent and invest in diversified income-producing assets like stocks and bonds, rather than taking on the weight of high transaction fees, a mortgage and other home-carrying costs.

Arguing that a home is often a “money pit” that funnels funds mostly into the bank’s pocket, he frequently warns that home ownership, at least early on, should be viewed as a liability. The bigger the house, the bigger the financial drain, he maintains.

“In my opinion, most people in their 20s and even 30s have no reason to be taking on that kind of debt,” O’Leary has previously told CNBC.

While most North American finance gurus frame homeownership as the keystone of generational wealth, O’Leary believes that too many people overestimate its benefits.

“You’re not rich if it’s all tied up in real estate,” he recently declared on the Fox Business Network.

O’Leary’s guidelines around protecting equity by not over-leveraging, not having mortgage payments exceed one-third of after-tax income and not reselling before at least five years have passed, largely align with official recommendations.

But his broader commentary, including his view that buying a home is a poor investment for the young, is often criticized as being out of touch.

Industry pushes back

“Home ownership remains one of the most important ways Canadians can build long-term wealth. So delaying a purchase can mean missing out on future equity and wealth creation,” says Don Kottick, president of Remax Canada.

“For real estate professionals, this is where their advisory role becomes critical,” continues Kottick. “There are many different pathways into homeownership, whether that’s a recreational property, co-ownership, a home with rental income potential, or a more affordable market outside the original search area. It’s about helping buyers find the right path that works best for their needs.”

Toronto-based Remax Realtron COO Cameron Forbes notes that a key advantage of home ownership over stocks is that a portion of each mortgage installment goes toward paying down principal, gradually building equity.

“In that sense, a home can serve as a powerful long-term savings vehicle alongside other investments.”

From a tax perspective, Forbes adds, “Canada also offers a significant advantage to homeowners through the principal residence exemption, which generally allows gains on the sale of a primary home to be realized tax-free.”

O’Leary’s comparison of the two assets ignores the forced savings and capital-gains-exempt benefits of housing, experts observe. It’s also been pointed out that renting instead of buying, then routinely “investing the difference” in stocks as O’Leary recommends, often fails in practice.

Not everyone fits neatly into O’Leary’s rubric, Yahoo Finance acknowledged in a report late last year.

“Some people want to buy a house solo. Others don’t want kids at all. Some are divorced, cohabitating, or just prefer homeownership” over renting long-term and battling unpredictable rent hikes, the platform stated.

There are also a growing number of single women entering the market independently.

There’s no one-size-fits-all.

The data on delayed buyers

While stats do show that Canada’s younger generations are waiting longer to buy their first home than ever before, it’s generally not due to lack of desire. Our first-time home buyers are now among the oldest in the world. Although nationally the 2026 Canada Mortgage and Housing Corporation’s “Mortgage Consumer Survey” still places most first-time buyers in the 25 to 34 age range, affordability pressures increasingly appear to be pushing that into the late 30s and beyond.

Figures jump significantly for first-time buyers in Ontario and British Columbia, where the median age has climbed to a seasoned 40 and 46, respectively, according to a widely quoted global housing study late last year by United Arab Emirates-based developer Bloom Holding.

The Ontario data engine/land registry Teranet reports: “What used to be an early career milestone has shifted deeper into mid-career, as prospective buyers need more time to build savings or equity before taking that first step into the market. Even with recent price moderation, this age trend highlights the affordability issues that continue to shape demand, delaying entry but not diminishing aspirations.”

Beyond the balance sheet

These shatterproof aspirations speak to the psychological and less quantifiable aspects of home ownership – autonomy, a sense of community and belonging, a safety net, a hedge against inflation.

“Home ownership is more than just a roof over our heads,” says Kim Fairley, president of the Ontario Real Estate Association. “It continues to hold symbolic and practical importance…It’s the place where we create memories, raise our families, and build our lives. While buying a home is one of the largest financial decisions you can make in your life, it often translates to financial security, becoming a nest egg for middle-class families to pass down and build generational wealth.”

Housing can also be downsized or tapped into via a reverse mortgage later in life to help fund retirement.

There’s certainly also value in investing in the stock market, says Fairley.

“But you can’t live in a stock.”

CMHC expects slow economic growth, weak housing demand, declining home prices, lower housing starts and easing rental markets in 2026. Housing market conditions are expected to improve gradually in 2027 and 2028.

Highlights

• We expect the economy to grow slowly in 2026. Stronger underlying activity from consumer spending, government investment and exports will be offset by ongoing geopolitical and trade uncertainty. Growth is projected to improve moderately in 2027 and 2028.

• Housing activity will likely remain weak in the near term, as very slow population growth, uncertainty, high borrowing costs and modest income growth continue to limit demand. We expect sales to improve gradually over the forecast period but to remain below levels typically seen in the last decade.

• We expect continued downward pressure on home prices and construction. Average prices will likely decline in 2026 and then rise slowly, while housing starts will continue to fall throughout the forecast period due to weak demand, high costs and elevated inventories.

• Rental construction is expected to ease gradually from its historical 2025 peak. Rent growth will slow, but rents are still high relative to incomes.

Economic forecast: Slow growth amid uncertainty

Our Canadian economic outlook has changed little since the Winter Housing Market Outlook. Baseline growth in 2026 is still expected to be a modest 0.7%. Consumer spending, government investment and a rebound in exports should support growth. On the other hand, weaker residential construction and strong import growth should weigh on the economy.

Uncertainty remains high throughout the forecast period. Global tensions, especially the U.S.-Iran war, will likely push inflation up temporarily in 2026. Ongoing U.S.-Canada trade uncertainty will likely weigh on business investment and hiring decisions.

Economic conditions will vary across the country. Western Canada is expected to lead growth in 2026, helped by stronger commodity prices resulting from the U.S.-Iran war. Central Canada is more affected by trade risks and is likely to lag. Conditions in Atlantic Canada remain the weakest. After 2027, economic growth should pick up compared with 2026, but it will still be moderate. As the economy strengthens more broadly, differences between regions should narrow, supported by more diversified trade and stronger business investment.

These economic conditions set the backdrop for the housing market outlook in Canada. Uncertainty and subdued economic and income growth continue to limit housing demand in the near term.

Housing forecast: Uneven adjustment to soft housing demand

Housing market activity in 2026 has so far been weaker than expected, particularly in sales and prices. This reflects slower population growth, ongoing economic uncertainty, high mortgage rates and slow income growth. Buyers continue to act cautiously. As a result, improved affordability alone hasn’t been enough to bring many buyers back into the market.

As economic growth and income gains strengthen in 2027 and 2028, buyer confidence should improve, and housing demand should gradually recover from these weak levels. Sales are expected to increase gradually over the forecast period but remain below typical levels seen in the last decade.

Conditions will differ across regions. Market momentum is expected to keep sales high in Prairie and Quebec markets. In contrast, British Columbia and Ontario will likely continue to struggle with historically weak sales levels due to affordability challenges and slower population growth.

Home prices will continue to adjust to weak housing demand and muted sales. Prices are expected to decline through 2026 and then grow only modestly afterward. Overall, very slow population growth and limited income gains should keep price increases moderate across the country.

Prairie markets will likely lead price growth because demand remains strong in that region, while Quebec should see modest gains due to more balanced market conditions. British Columbia and Ontario are likely to see the weakest growth because of slower population growth, affordability challenges and higher supply.

Subdued housing demand will also weigh on new construction. Housing starts are expected to decline further as builders continue to respond to unsold inventories and high construction costs. Historically low levels of construction will be most visible in Ontario and British Columbia, particularly in the condominium market. Housing starts in the Prairies and Quebec will also decline, but from recent peaks. Rental construction is expected to ease gradually from its historic 2025 peak. Maintaining a sustainable level of rental construction remains important to support future housing needs, particularly as demand currently suppressed by affordability constraints should materialize towards the end of the forecast horizon.

National rental markets should continue easing in 2026. New supply is increasing, especially from purpose-built rental projects. This will help lift vacancy rates and slow average rent growth, particularly for asking rents. This easing is more noticeable in larger markets such as Toronto and Vancouver, which are more affected by slower population growth and a larger supply of condominiums in secondary rental markets. In contrast, Prairie markets will likely continue to see modest rent increases, reflecting stronger demand.

Although overall rental conditions are improving, affordability remains a challenge. Rents are still high relative to income, especially when units turn over.

Alternative scenario

Downside risks to the forecast remain. Inflation could remain high if the U.S.-Iran war drives oil prices higher and further disrupts supply chains, or if trade tensions intensify. This would further weaken confidence and slow income growth. In this case, housing demand would remain soft for longer. Home sales, prices and construction would recover more slowly, and rental markets would continue to ease as supply outpaces demand.

Forecast Summary (Calgary)

• Total Starts (New builds)
  - 2024_ 24,369
  - 2025_ 27,684
  - 2026_ 22,000  Forecast baseline
  - 2027_ 21,000  Forecast baseline
  - 2028_ 19,000  Forecast baseline

Resale Market

• MLS Sales
  - 2024_ 34,567
  - 2025_ 27,902
  - 2026_ 26,500 Forecast baseline
  - 2027_ 26,000 Forecast baseline
  - 2028_ 27,000 Forecast baseline

• MLS Average Price
  - 2024_ $622,457
  - 2025_ $644,091
  - 2026_ $650,000 Forecast baseline
  - 2027_ $645,000 Forecast baseline
  - 2028_ $650,000 Forecast baseline

Rental Market

• Vacancy Rate
  - 2024_ 4.8
  - 2025_ 5.0
  - 2026_ 5.9 Forecast baseline
  - 2027_ 6.2 Forecast baseline
  - 2028_ 5.8 Forecast baseline

• Average rent: Two-bedroom
  - 2024_ $1882
  - 2025_ $1914
  - 2026_ $1948 Forecast baseline
  - 2027_ $1982 Forecast baseline
  - 2028_ $2030 Forecast baseline

Courtesy CMHC

Calgary, Alberta, July 2, 2026 – June sales in Calgary improved over May, reaching 2,197 units. Despite the monthly gains, sales were nearly four per cent lower than last year and just below the long-term average for June, largely due to pullbacks in apartment-style units. While sales are down across most price ranges so far this year, there have been gains in both the highest price ranges and the most affordable ranges across most property types. 

“The easing of demand for resale homes does not come as a surprise given the recent decline in migration, which is impacting both rental and ownership demand for higher-density homes. The bigger change in our market relates to inventory, which has been on the rise in the rental, resale and new-home markets following several consecutive years of record-high housing starts,” said Ann-Marie Lurie, Chief Economist at the Calgary Real Estate Board (CREB®). “Inventory growth has mostly occurred in high-density homes, resulting in buyer’s market conditions and steep price adjustments for condominium apartments. While it will take time to absorb the high-density supply, detached supply growth has been limited and some districts are reporting record-high prices.” 

New listings are starting to pull back compared with 2025 and the sales-to-new-listings ratio rose to 56 per cent. This has slowed the pace of inventory growth in the market and kept the months of supply at just over three months. This is considered a balanced range in the city, but conditions vary across property types. The apartment condominium sector is experiencing buyer’s market conditions, with the months of supply at nearly five months and a sales-to-new-listings ratio of 45 per cent. 

The range of conditions is also impacting prices. In June, the unadjusted benchmark price was $572,500, up over the previous month and two per cent below levels reported last June. However, apartment-style properties have reported an annual decline nearing nine per cent, leaving condominium prices in June at $299,000. Meanwhile, the benchmark price for a detached home rose over the previous month, reaching $750,500, one per cent below last year’s level, with most of the adjustments driven by specific pockets of the market.

Detached

Sales activity in June reached 1,202 units, in line with last year’s levels, as gains for homes priced over $1,000,000 and under $600,000 offset pullbacks in the other price ranges. Sales growth in these segments was partly supported by increases in new listings and inventory growth in those same ranges. While overall inventories have remained in line with last year’s levels and conditions remain relatively balanced, the pullback in new listings this month caused the sales-to-new-listings ratio to rise to 60 per cent. Despite balanced conditions citywide, the North East and East districts are experiencing excess supply relative to demand. In these districts, the months of supply is elevated and the sales-to-new-listings ratio is below 50 per cent. Relatively balanced conditions have supported monthly price gains since the start of the year. It is only the City Centre and West districts that have recorded enough of these gains to reach record-high prices in June. The West district, which has also been experiencing seller’s market conditions, has reported the strongest year-over-year growth at nearly four per cent. Meanwhile, buyer’s market conditions in the North East are contributing to price declines nearing seven per cent. As of June, the citywide benchmark price was $750,500, up over the previous month and over one per cent lower than last year.

Semi-Detached

Improving sales in June were nearly enough to offset earlier pullbacks, leaving year-to-date sales down by only one per cent compared with last year. The 234 sales in June were met with 363 new listings, pushing the sales-to-new-listings ratio back above 60 per cent and slowing the pace of inventory growth compared with earlier in the year. With two and a half months of supply, conditions remained relatively balanced and continued to support stable prices. In June, the unadjusted benchmark was $694,600, up over the previous month and similar to levels reported last June. Similar to the detached sector, price movements vary significantly across the city. Compared with last year, prices have improved in the North West, West and City Centre districts, reaching a new record high in June while the steepest declines occurred in the North East at nearly six per cent.

Row

June saw a pullback in both sales and new listings activity, causing the sales-to-new-listings ratio to rise to 55 per cent. This prevented any further gains in inventory levels, which remain above long-term trends. With 1,152 units in inventory and 338 sales this month, the months of supply sat at nearly three and a half months. While this is higher than both the detached and semi-detached sectors, it remains within the upper end of a balanced range. Additional supply choice has led to price adjustments. Year-over-year declines have occurred across all districts, ranging from two per cent in the South to 10 per cent in both the North East and East districts. Unadjusted prices improved in June over the previous month, as gains in the City Centre, North West and South districts offset pullbacks in the East, North East, West and South East districts.

Apartment Condominium

Sales in June continued to fall compared with last year, causing year-to-date sales to decline by 26 per cent to a total of 2,260 units. While new listings eased this month, the 931 new listings and 423 sales kept the sales-to-new-listings ratio at 45 per cent. In June, inventory levels reached 2,076 units – slightly lower than last June’s level but more than 24 per cent above typical inventory levels. This kept the months of supply at around five months, contributing to further price adjustments. In June, the unadjusted benchmark price was $299,000, down over the previous month and nearly nine per cent lower than last year. Prices have declined across all districts, with decreases exceeding 14 per cent in the North East and East districts. The smallest decline occurred in the North West district at seven and a half per cent.

REGIONAL MARKET FACTS

Airdrie

Sales in June continued to ease compared with last year, contributing to a year-to-date decline of 14 per cent. New listings also eased this month, but with a steeper pullback in sales, the sales-to-new-listings ratio fell to 47 per cent. June inventory levels rose to 538 units. Higher inventory and slower sales pushed the months of supply above four months. Elevated levels of supply in Airdrie, along with increased competition from neighbouring and new home markets, have weighed on resale prices. In June, the unadjusted benchmark price was $516,900, up slightly over the previous month but nearly four per cent lower than last year. Prices declined across all property types, with larger decreases observed in higher-density homes.

Cochrane

Easing sales in June did not offset earlier gains, as year-to-date sales of 569 units were slightly higher than last year’s levels. Meanwhile, new listings also eased, keeping the sales-to-new-listings ratio above 60 per cent. Inventory levels eased slightly from the previous month, reaching 323 units in June. The monthly pullback in inventory did not outpace the pullback in sales, causing the months of supply to push above three months. Despite the increase, relatively tight conditions have supported monthly price gains over the past five months. As of June, the unadjusted benchmark price was $580,200, less than two per cent lower than prices reported at this time last year.

Okotoks

With 89 new listings and 70 sales in June, the sales-to-new-listings ratio rose to 79 per cent, preventing any further monthly gains in inventory levels. Inventory has improved compared with last year but remains below long-term trends, especially for detached homes. While conditions are more balanced compared to last year, lower supply levels have helped keep prices stable. In June, the unadjusted benchmark price was $618,600, similar to the previous month and less than two per cent lower than last June.

Click here to view the full City of Calgary monthly stats package.

Click here to view the full Calgary region monthly stats package.

Courtesy CREB