Can I Get A Mortgage With No Downpayment?

Jen & Cory • December 18, 2018

The simple answer to this question is no. In order to secure mortgage financing in Canada you have to come up with at least a 5% downpayment.

Now, if you haven't set aside the 5% for a downpayment in your savings account, that is okay. There are still a few ways to get you a mortgage.

Gifted Downpayment

With the cost of living going up all the time, there is no doubt that saving for a downpayment is harder now than it once was. If you have a family member who has money and is willing to help you buy a property, they can gift you the funds for your downpayment.

The gift has to come from an immediate family member who will sign a gift letter indicating there is no schedule of repayment and that the gift doesn't have to be repaid. Proof that the money has been deposited to your account will be required through bank statements.

Gifted funds can make up part of or the entire amount of downpayment. For example; you are purchasing a property for $300k, you have $10k saved up, your parents are able to gift you the remaining $5k to make up the total 5% downpayment.

Borrowed Downpayment

If you aren't fortunate enough to have a family member who can gift you a downpayment but you have excellent credit and a high income compared to what you are borrowing, you might qualify to borrow your downpayment. This would be separate from and in addition to the mortgage funds.

It is possible to borrow your 5% downpayment as long as you include the payments in your debt service ratios.

The Canadian Mortgage and Housing Corporation (CMHC) has a program that allows you to use Non-Traditional Sources of Downpayment, which is described as "any source that is arm's length to and not tied to the purchase and sale of the property, such as borrowed funds, 100% sweat equity, lender cash back incentives."

For example; you are purchasing a property for $250k and you have a line of credit with a $20k limit but no outstanding balance. You could use that line of credit to borrow the $12,500 needed for the 5% downpayment assuming you can afford to carry the additional debt of the payments from the line of credit. Typically this is figured at 3% of the outstanding balance, in this case $375 per month.

RRSP Homes Buyers Plan

Okay, so you don't have the money set aside in your savings, but you do have a nice little RRSP going. Assuming you are a first time home buyer, you can access the money from your RRSP Tax Free to use as a downpayment. You are able to access up to $25k individually or $50k as a couple and the money has to be paid back into your RRSPs over the next 15 years.

Below is the Home Buyer's Plan (HBP) PDF document from Canada Revenue Agency for your reference.

Home Buyers Plan (HBP) - CRA


Regardless of how much money you have available to you at this time for a downpayment, if you are considering purchasing a property in the near future, please let us know.

It's never too early to start the conversation about getting pre-approved for a mortgage. Please contact us anytime, we'd love to work with you.

Jen & Cory
YOUR MORTGAGE EXPERTS

CONTACT US
Recent Posts

Home Reno Dreams? Let’s Talk Mortgage Financing

By Jen & Cory • November 26, 2025
How to Use Your Mortgage to Finance Home Renovations Home renovations can be exciting—but they can also be expensive. Whether you're upgrading your kitchen, finishing the basement, or tackling a much-needed repair, the cost of materials and labour adds up quickly. If you don’t have all the cash on hand, don’t worry. There are smart ways to use mortgage financing to fund your renovation plans without derailing your financial stability. Here are three mortgage-related strategies that can help: 1. Refinancing Your Mortgage If you're already a homeowner, one of the most straightforward ways to access funds for renovations is through a mortgage refinance. This involves breaking your current mortgage and replacing it with a new one that includes the amount you need for your renovations. Key benefits: You can access up to 80% of your home’s appraised value , assuming you qualify. It may be possible to lower your interest rate or reduce your monthly payments. Timing tip: If your mortgage is up for renewal soon, refinancing at that time can help you avoid prepayment penalties. Even mid-term refinancing could make financial sense, depending on your existing rate and your renovation goals. 2. Home Equity Line of Credit (HELOC) If you have significant equity in your home, a Home Equity Line of Credit (HELOC) can offer flexible funding for renovations. A HELOC is a revolving credit line secured against your home, typically at a lower interest rate than unsecured borrowing. Why consider a HELOC? You only pay interest on the amount you use. You can access funds as needed, which is ideal for staged or ongoing renovations. You maintain the terms of your existing mortgage if you don’t want to refinance. Unlike a traditional loan, a HELOC allows you to borrow, repay, and borrow again—similar to how a credit card works, but with much lower rates. 3. Purchase Plus Improvements Mortgage If you're in the market for a new home and find a property that needs some work, a "Purchase Plus Improvements" mortgage could be a great option. This allows you to include renovation costs in your initial mortgage. How it works: The renovation funds are advanced based on a quote and are held in trust until the work is complete. The renovations must add value to the property and meet lender requirements. This type of mortgage lets you start with a home that might be more affordable upfront and customize it to your taste—all while building equity from day one. Final Thoughts Your home is likely your biggest investment, and upgrading it wisely can enhance both your comfort and its value. Mortgage financing can be a powerful tool to fund renovations without tapping into high-interest debt. The right solution depends on your unique financial situation, goals, and timing. Let’s chat about your options, run the numbers, and create a plan that works for you. 📞 Ready to renovate? Connect anytime to get started!

Fixed vs. Variable Mortgage Rates in Canada

By Jen & Cory • November 19, 2025
Fixed vs. Variable Rate Mortgages: Which One Fits Your Life? Whether you’re buying your first home, refinancing your current mortgage, or approaching renewal, one big decision stands in your way: fixed or variable rate? It’s a question many homeowners wrestle with—and the right answer depends on your goals, lifestyle, and risk tolerance. Let’s break down the key differences so you can move forward with confidence. Fixed Rate: Stability & Predictability A fixed-rate mortgage offers one major advantage: peace of mind . Your interest rate stays the same for the entire term—usually five years—regardless of what happens in the broader economy. Pros: Your monthly payment never changes during the term. Ideal if you value budgeting certainty. Shields you from rate increases. Cons: Fixed rates are usually higher than variable rates at the outset. Penalties for breaking your mortgage early can be steep , thanks to something called the Interest Rate Differential (IRD) —a complex and often costly formula used by lenders. In fact, IRD penalties have been known to reach up to 4.5% of your mortgage balance in some cases. That’s a lot to pay if you need to move, refinance, or restructure your mortgage before the end of your term. Variable Rate: Flexibility & Potential Savings With a variable-rate mortgage , your interest rate moves with the market—specifically, it adjusts based on changes to the lender’s prime rate. For example, if your mortgage is set at Prime minus 0.50% and prime is 6.00% , your rate would be 5.50% . If prime increases or decreases, your mortgage rate will change too. Pros: Typically starts out lower than a fixed rate. Penalties are simpler and smaller —usually just three months’ interest (often 2–2.5 mortgage payments). Historically, many Canadians have paid less overall interest with a variable mortgage. Cons: Your payment could increase if rates rise. Not ideal if rate fluctuations keep you up at night. The Penalty Factor: Why It Matters More Than You Think One of the biggest surprises for homeowners is the cost of breaking a mortgage early —something nearly 6 out of 10 Canadians do before their term ends. Fixed Rate = Unpredictable, potentially high penalty (IRD) Variable Rate = Predictable, usually lower penalty (3 months’ interest) Even if you don’t plan to break your mortgage, life happens—career changes, family needs, or new opportunities could shift your path. So, Which One is Best? There’s no one-size-fits-all answer. A fixed rate might be perfect for someone who wants stable budgeting and plans to stay put for years. A variable rate might work better for someone who’s financially flexible and open to market changes—or who may need to exit their mortgage early. Ultimately, the best mortgage is the one that fits your goals and your reality —not just what the bank recommends. Let's Find the Right Fit Choosing between fixed and variable isn’t just about numbers—it’s about understanding your needs, your future plans, and how much financial flexibility you want. Let’s sit down and walk through your options together. I’ll help you make an informed, confident choice—no guesswork required.