Can You Get a Mortgage with No Down Payment in Canada?
As of 2024, zero down payment mortgages are no longer available directly from federally regulated lenders in Canada. The government eliminated the “Flex Down” 0% down option in 2008. However, there are still legitimate strategies that allow Canadians to purchase a home with little or no money from their own savings.
Minimum Down Payment Requirements in Canada (2024)
| Purchase Price | Minimum Down Payment |
|---|---|
| Under $500,000 | 5% |
| $500,001 – $999,999 | 5% on first $500K + 10% on the remainder |
| $1,000,000 or more | 20% minimum (no CMHC insurance available) |
For a $700,000 home: 5% on $500,000 = $25,000 + 10% on $200,000 = $20,000 = $45,000 minimum down payment.
Strategies to Buy with Little or No Savings
1. Gifted Down Payment
Canadian lenders allow down payments to be gifted by an immediate family member (parent, sibling, or spouse) with no repayment requirement. The lender will ask for a gift letter confirming it is not a loan.
2. RRSP Home Buyers’ Plan (HBP)
First-time buyers can withdraw up to $35,000 per person from their RRSP tax-free under the Home Buyers’ Plan. Couples can withdraw up to $70,000 combined. Funds must have been in the RRSP for 90+ days.
3. First Home Savings Account (FHSA)
The FHSA (launched 2023) allows first-time buyers to contribute up to $8,000/year (lifetime maximum $40,000) and withdraw it tax-free for a home purchase — with no repayment required.
4. Borrowed Down Payment (Flex Down — Private Lenders)
While regulated banks cannot accept a borrowed down payment for insured mortgages, some alternative and private lenders may accept a borrowed down payment if you have sufficient income to service both loans. This significantly increases your debt load and must be approached carefully.
5. Government First-Time Home Buyer Incentive (Note: Program Ended March 2024)
The FTHBI shared equity mortgage program — where CMHC contributed 5%–10% toward a down payment — ended in March 2024. It is no longer available.
6. Equity from a Co-Signer’s Property
If a parent or family member owns a home, they may use the equity in their property as collateral in a “blend and extend” or co-signing arrangement to help you qualify and cover part of the down payment.
What About a 5% Down Payment Mortgage?
The lowest available conventional down payment in Canada is 5% on homes under $500,000. With a 5% down payment, you must purchase CMHC mortgage insurance:
| Down Payment | CMHC Insurance Premium |
|---|---|
| 5% – 9.99% | 4.00% of mortgage amount |
| 10% – 14.99% | 3.10% of mortgage amount |
| 15% – 19.99% | 2.80% of mortgage amount |
| 20% or more | No insurance required |
CMHC insurance is added to your mortgage principal — it is not paid upfront. On a $400,000 mortgage with 5% down, the 4% premium adds $16,000 to your mortgage.
How to Save for a Down Payment Faster
- Open an FHSA and contribute $8,000/year (immediate tax deduction)
- Maximize RRSP contributions and plan to use the HBP
- Set up automatic monthly transfers to a dedicated down payment savings account
- Consider co-ownership with a trusted family member to combine resources
- Look at markets outside Toronto/Vancouver where 5% down is more achievable (Barrie, Brantford, Hamilton, Kingston)
Frequently Asked Questions: No Down Payment Mortgages
Can I borrow my down payment from a family member?
CMHC-insured lenders require that borrowed down payments be disclosed and approved. Most only accept gifted (non-repayable) funds. B lenders and private lenders may be more flexible.
What is the smallest down payment for a $600,000 home in Ontario?
5% on the first $500,000 ($25,000) + 10% on $100,000 ($10,000) = $35,000 minimum.
Can I use a line of credit as a down payment in Canada?
Using a borrowed line of credit as a down payment requires full disclosure. It is generally not allowed by A lenders for CMHC-insured mortgages. B and private lenders may accept it with strong income to support both payments.
Does my employer’s down payment assistance count?
Yes, many employer relocation programs include forgivable loans or grants for down payments. These may be acceptable to lenders if properly documented.
Work with a Mortgage Agent Who Knows Every Down Payment Option
Saif Abdulah is a Licensed Mortgage Agent Level 2 with 8Twelve Mortgage. He helps buyers across Ontario explore every available down payment strategy — RRSP, FHSA, gifts, co-signing, and more.
