You’re dreaming of your first home.
You’ve got your sights set on the front door, the kitchen, maybe even a backyard.
But let’s talk about the part that makes or breaks the deal:

The down payment.

This isn’t just a number. It’s the key that unlocks everything.
The size of your down payment determines:

• What kind of home can you afford

• Whether you’ll need mortgage insurance

• Your monthly payments

• And sometimes… whether you even get approved at all

Let’s break down what you really need to know as a first-time buyer in Ontario.

1. Minimum Down Payment Rules in Canada

Canada uses a tiered system. Here’s how it works:

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

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

• 20% minimum for homes $1 million and up (not insurable)

Example:
On a $700,000 home, you’ll need:

• 5% of $500,000 = $25,000

• 10% of $200,000 = $20,000
  Total = $45,000

Important:
If your down payment is under 20%, you’ll need mortgage default insurance from CMHC, Sagen, or Canada Guaranty. That premium is added to your mortgage, but it affects your affordability.

2. Where Can Your Down Payment Come From?

Let’s get real. Most people don’t have $50K just lying around.
But lenders do care where your funds come from and they need documentation.

Acceptable sources include:

• Personal Savings or Investments

• Show at least 90 days of statements

• Large, last-minute deposits? You’ll need to explain them

• Gifted Funds From Family

• Must come from an immediate relative

• A signed gift letter is required (and no, you can’t “gift yourself” money)

• Funds should be in your account at least 15 days before closing

• RRSP Home Buyers’ Plan (HBP)

• Withdraw up to $35,000 tax-free from your RRSP

• Two buyers = $70,000 combined

• You have 15 years to pay it back (starting in year two)

• First Home Savings Account (FHSA)

• Save up to $8,000/year, to a lifetime max of $40,000

• Contributions are tax-deductible, and withdrawals for your first home are tax-free

• Yes, you can combine FHSA and RRSP HBP for up to $75,000 per person

3. Can You Borrow Your Down Payment?

Yes. But tread carefully.

You can use:

• A personal loan

• Line of credit

• Cashback mortgage

But here’s what lenders consider:

• The loan payment counts toward your debt ratios

• It can reduce how much you qualify for

• Some lenders won’t allow borrowed funds for insured mortgages

Borrowing can help bridge a gap, but it should be a last resort, not your entire plan.

4. Why You Should Save More Than the Minimum

Aiming for the bare minimum might get you in the door…
But adding a little extra gives you leverage and breathing room.

Even an extra $5,000 to $10,000 can:

• Lower your monthly mortgage payment

• Reduce your CMHC insurance premium

• Improve your mortgage approval ratios

• Strengthen your stress test numbers

• Build instant equity

In other words: less debt, more flexibility, and fewer surprises.

5. Build a Smart Down Payment Game Plan

This is where winning buyers separate themselves.

Here’s how to do it:

• Open an FHSA and automate your contributions

• Max out your RRSP - tax refund now, equity later

• Set up an auto-transfer into a separate "home fund" account

• Track your progress monthly - don’t aim for perfect, aim for consistent

If you’re serious about owning a home, treat your savings plan like a non-negotiable bill.

The Bottom Line

Your down payment doesn’t just buy a house, it buys options.

Whether it’s saving more, stacking your tax-advantaged accounts, or combining programs, the key is to start now and build a strategy that works for you, not against you.

Let’s Build Your Personalized Down Payment Plan

You don’t have to figure this out alone.

Schedule your free 20-minute consultation at borcic.ca
I’ll help you run the numbers, weigh your options, and build a real plan - no guesswork, no pressure.