Do You Need 20% Down to Buy a Home in Canada? (BC Buyers Guide)

Understanding Minimum Down Payments, Mortgage Insurance, and Buyer Options in BC

One of the most common myths I hear from buyers is that you have to save 20% before you can buy a home in Canada. The truth is, you do not need 20% down to buy a home, and for many buyers, waiting that long actually delays homeownership more than it helps.

What matters most is understanding:

• The real minimum down payment rules

• How mortgage insurance works

• How your down payment affects your monthly payment and long-term plan

Let’s break it down in a clear, realistic way.

Where the 20% Myth Comes From

The idea that 20% is required usually comes from two places:

• People wanting to avoid mortgage insurance

• Confusion between “minimum down payment” and “ideal down payment”

While putting 20% down can make sense for some buyers, it’s not a requirement to purchase a home in Canada.

What Is the Minimum Down Payment in Canada?

In most cases, the minimum down payment looks like this:

• 5% on the first $500,000 of the purchase price

• 10% on the portion between $500,000 and $999,999

• 20% is required only for homes priced $1,000,000 or more

That means many first-time and move-up buyers can enter the market with much less than 20% saved.

What Is Mortgage Insurance (CMHC) — and Why It Exists

If you put less than 20% down, your mortgage will include mortgage default insurance (often called CMHC insurance).

This insurance:

• Protects the lender, not the buyer

• Allows buyers to purchase with a smaller down payment

• Is added to your mortgage, not paid upfront in cash

While mortgage insurance does increase your overall loan amount slightly, it also allows many buyers to stop renting sooner and start building equity earlier.

For a lot of people, that trade-off makes sense.

How Your Down Payment Affects Your Monthly Payment

A larger down payment can:

• Lower your monthly mortgage payment

• Reduce interest paid over time

• Eliminate mortgage insurance if you reach 20%

However, waiting years to save a larger down payment can also mean:

• Paying rising rents

• Facing higher home prices

• Missing out on equity growth

For many buyers, the right question isn’t, “How much can I save?”… it’s more so, “What monthly payment is comfortable for me right now?”

Less Down vs More Down: What to Consider

Putting less than 20% down may make sense if:

• You have stable income but limited savings

• You want to enter the market sooner

• Your monthly payment fits comfortably within your budget

Putting 20% or more down may make sense if:

• You have significant savings

• You want to avoid mortgage insurance

• You’re purchasing at a higher price point

There’s no one-size-fits-all answer. It’s about aligning your down payment with your overall financial picture.

First-Time Buyers: A Common Reality

Many first-time buyers assume they’re “not ready” simply because they don’t have 20% saved.

In reality, plenty of buyers purchase successfully with:

• 5–10% down

• A solid pre-approval

• A clear understanding of monthly costs

The biggest risk isn’t buying with less than 20% down. It’s not understanding your numbers before you start.

The Bottom Line

You do not need 20% down to buy a home in Canada.

What you do need is:

• A clear understanding of your minimum down payment options

• A realistic monthly budget

• A plan that fits your life, not just a rule you heard somewhere

Homeownership isn’t about hitting a perfect number. It’s about making an informed, confident decision.

If you’re unsure whether your current savings are enough, or you’re trying to decide whether waiting or buying sooner makes more sense for you, having a conversation early can bring a lot of clarity.

Whether you’re ready now or still planning months ahead, I’m always happy to walk through your options, answer questions, and help you understand what your next step could look like, with no pressure.