One of the most common mortgage myths we hear is that you must have a 20% down payment to buy a home. While putting 20% down can be beneficial in some cases, it’s not required for many buyers in British Columbia. In fact, a large number of first-time and move-up buyers are surprised to learn they can purchase a home with far less.
Understanding how down payments actually work can help you plan with confidence and avoid delaying your homeownership goals unnecessarily. Here are some typical questions our broker team get asked, and answers to help you.
What Is the Minimum Down Payment in Canada?
In most cases, the minimum down payment depends on the purchase price of the home. For properties priced up to $500,000, buyers can put as little as 5% down. For homes priced between $500,000 and $999,999, 5% will be needed for the first $500,000 and 10% for the remaining amount. A full 20% down payment is only required when the purchase price reaches $1 million or more.
This means many buyers in Kelowna and throughout the Okanagan may be able to enter the housing market without needing to save a full 20%.
What Happens If You Put Less Than 20% Down?
When a down payment is under 20%, mortgage default insurance is required. While this insurance protects the lender, it allows us to help buyers access competitive interest rates and purchase sooner, without draining their savings. For many clients, this approach provides flexibility while still keeping monthly payments manageable.
When 20% Down Makes Sense
There are situations where putting 20% down can be a smart move. It can help avoid the cost of mortgage insurance, and reduce your overall borrowing costs. This may also be required for certain property types, such as investment properties.
Other Ways We Help Buyers Fund a Down Payment
We regularly help clients use gifted funds from immediate family, RRSP savings through the Home Buyers’ Plan, or a combination of savings and incentives to reach their down payment goals.
If you’re unsure how much you need to put down, contact us, we’re here to help. Call Rampone-Marsh Mortgages at 250-801-8834 or visit us at 1290 St Paul St #316, Kelowna, BC for clear, personalized mortgage advice.
