Can You Buy a Home in Canada with No Down Payment?
If you’re dreaming of owning your first home but worried you haven’t saved enough for a down payment, you’re not alone. With rising home prices, many first-time buyers in Canada are asking: “Can I buy a house with no down payment?”
Let’s break down the truth, the myths, and the real strategies you can use to become a homeowner in 2025, even if you don’t have a large lump sum saved.
What Does “No Down Payment” Really Mean?
In Canada, the minimum required down payment is:
- 5% for homes up to $500,000
- 5% on the first $500K + 10% on the amount above, for homes under $1.5 million
- 20% for homes priced over $1.5 million (uninsured)
Example Calculation
- For a $1,200,000 purchase price:
- 5% of first $500K → $25,000
- 10% of the remaining $700K → $70,000
- Total minimum down payment = $95,000 (≈ 8.0%)
So, you can’t technically purchase a home with zero down out of pocket unless you’re using borrowed or gifted funds.
Legal Ways to Buy a Home with No Personal Savings
1. Use the Home Buyers’ Plan (HBP)
Withdraw up to $60,000 per person from your RRSP tax-free to fund your down payment. You’ll have 15 years to repay the amount back into your RRSP but it gets you into the market sooner.
🛠 Tip: If you’re buying with a partner, you can combine your HBP withdrawals for up to $120,000.
2. Open a First Home Savings Account (FHSA)
This powerful new tool combines the benefits of an RRSP and TFSA. Contributions are tax-deductible, and withdrawals for your first home are tax-free.
- Contribute up to $8,000/year, with a lifetime max of $40,000
- Can be combined with HBP for even more savings
3. Get a Gifted Down Payment
Many first-time buyers get financial help from parents or family. Lenders will accept gifted funds with a simple gift letter confirming it’s not a loan.
4. Borrow the Down Payment
Some lenders allow you to borrow the 5% down using a:
- Personal loan
- Line of credit
- Loan from a family member
You’ll need strong credit and income to qualify, as this adds to your debt load.
5. Private or Alternative Lenders
In some cases, private lenders may offer true zero-down mortgages, but they usually come with:
- Higher interest rates
- Shorter terms
- Stricter conditions
These should be a last resort. Speak with an Indi Mortgage team member to weigh the risks.
The First-Time Home Buyer Incentive (FTHBI) Is Gone
The federal government officially discontinued the FTHBI in March 2024. While it aimed to help with down payments, it was unpopular and restrictive. Luckily, the FHSA and enhanced HBP limits have taken its place with better flexibility and no shared equity.
What’s the Best Strategy for You?
It depends on your situation, and that’s where Indi Mortgage can help.
We’ll review your:
- Income and credit score
- Available savings and RRSPs
- Gift or loan options
- Local home prices and programs (like Ontario’s land transfer tax rebate)
Ready to Take the First Step?
Buying your first home doesn’t have to mean waiting years to save. With the right advice, you can become a homeowner sooner than you think, even with little or no down payment saved.
Book a free mortgage strategy call today and let’s run the numbers together.
Reach out for a free, no-pressure conversation.
You don’t have to navigate this alone. Contact us and we will guide you every step of the way.
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At Indi Mortgage, we offer a fresh, modern approach! One that’s simple, transparent, and built entirely around your needs and long term goals. We believe getting a mortgage shouldn’t feel overwhelming. It should feel empowering and exciting!
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