Your down payment, purchase deposit and mortgage insurance are related to the purchase, but they are not the same thing. Understanding the difference before making an offer helps you know how much cash needs to be available and when.
For an owner-occupied home in Canada, the current minimum down payment is generally:
For example, on a $600,000 home, the minimum down payment would be $35,000.
If your down payment is below 20%, you will typically need mortgage loan insurance, sometimes called mortgage default insurance.
This insurance protects the lender, not the buyer. The insurance premium is usually added to the mortgage rather than paid entirely in cash at closing.
The deposit is the money you provide according to the terms of the purchase contract when your offer is made or accepted.
In Alberta:
This means your deposit funds need to be readily accessible when you are making offers. They cannot necessarily be tied up somewhere that takes several days or weeks to access.
Putting down more than the minimum can reduce the amount you need to borrow and, once you reach 20%, generally removes the requirement for borrower-paid mortgage default insurance.
But using every available dollar for the down payment is not always the best decision. You will still need money for closing costs, moving expenses and the inevitable purchases or repairs that come with owning a home.
The goal is not simply to reach the minimum down payment. It is to structure the purchase so you still have enough financial flexibility after you get the keys.
Canada has several programs that can help eligible first-time buyers save for a home, access existing savings or reduce some of the costs of buying. The rules are not identical, so it is important to confirm eligibility for each program separately.
An FHSA allows eligible first-time buyers to save toward a qualifying first home on a tax-advantaged basis.
Current limits include:
Contributions are generally tax-deductible, while qualifying withdrawals for a first home are tax-free. Importantly, FHSA contribution room only begins once you actually open your first FHSA.
Official information:
First Home Savings Account — CRA
The Home Buyers' Plan allows eligible buyers to withdraw up to $60,000 from their RRSPs to buy or build a qualifying home.
You can use an HBP withdrawal and a qualifying FHSA withdrawal toward the same home, provided you meet the requirements of both programs.
For a first HBP withdrawal made between January 1, 2026 and December 31, 2028, the temporary repayment relief means the 15-year repayment period begins in the fifth year following the year of the first withdrawal.
Official information:
Home Buyers' Plan — CRA
Eligible home buyers may claim up to $10,000 as the federal Home Buyers' Amount.
This is a non-refundable tax credit. It does not provide $10,000 toward the purchase price; instead, it can reduce the federal income tax you owe.
Official information: Home Buyers' Amount — CRA
This program is particularly relevant if you are considering a newly built or substantially renovated home.
Eligible first-time buyers may recover:
The qualifying home must generally be newly built or substantially renovated and intended as the buyer's primary residence. It does not apply to an ordinary resale home.
Official information:
First-Time Home Buyers' GST/HST Rebate — CRA
First-time home buyer” is not defined exactly the same way for every program. Before relying on an FHSA, HBP, tax credit or GST/HST rebate, confirm that you meet the eligibility requirements for that specific program.
Program limits and eligibility rules can change. Always confirm current information with CRA or your financial or tax adviser before relying on a program for your purchase.
Once an offer is accepted, the condition period is your opportunity to investigate the property before deciding whether you are prepared to proceed. The appropriate due diligence depends on the type, age and circumstances of the property.
Identify visible defects, maintenance concerns and areas that may require specialist investigation.
A pre-approval is not final approval. Your lender still needs to approve the property and may require an appraisal.
Review title registrations, easements, restrictive covenants, property boundaries and, where applicable, the Real Property Report and municipal compliance.
Review reserve funding, financial statements, bylaws, minutes, insurance, special assessments and significant planned work.
Acreages, older homes, unusual construction and other property types can require additional specialists or documentation.
