Can I Get A Mortgage With No Downpayment?

Diane Buchanan • April 4, 2019

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.” Reference: CMHC Quick Reference Guide.

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.

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 me know.

It’s never too early to start the conversation about getting pre-approved for a mortgage.

DIANE BUCHANAN
 Mortgage Broker

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Selling Your Property? Let's Talk

By Diane Buchanan • July 9, 2025
If you’ve been thinking about selling your existing property, for whatever reason, it would be in your best interest to connect with an independent mortgage professional before calling your real estate agent or listing it yourself. And while talking with your mortgage professional might not sound like the most logical place to start, here are a few scenarios that explain why it makes the most sense. If you’re buying a new property If you’re selling your property, chances are, you’ll have to move somewhere! So, if you plan on buying a new property using the equity from the sale of your existing property, chances are you’ll need a new mortgage. Don’t assume that just because you’ve secured mortgage financing before, that you’ll qualify again. Mortgage rules are constantly changing; make sure you have a pre-approval in place before you list your property. Also, by connecting with a mortgage professional first, you can look into your existing mortgage terms. You might be able to port your mortgage instead of getting a new one, which could save you some money. If you’re not buying a new property Even if you aren’t buying a new property and want to sell your existing property, it’s still a good idea to connect with a mortgage professional first, as we can look at the cost of breaking your mortgage together. Unless you have an open mortgage, or a line of credit, there will be a penalty to break your mortgage. The goal is to work on a plan to minimize your penalty. Because of how mortgage penalties work, sometimes it’s just a matter of waiting a few months to save thousands. You'll never know unless you take a look at the details. Marital breakdown The simple truth is that marriages break down. When that happens, often, people want closure, and unfortunately, they make decisions without really thinking them through or seeing the full picture. So, instead of simply selling the family home because that feels like the only option, please know that special programs exist that allow one party to buy out the former spouse. The key here is to have a legal separation agreement is in place. If you’d like to discuss the sale of your property and your plans for the future, connect anytime. It would be a pleasure to work with you!

Buying a Vacation Home? Here’s What You Need to Know

By Diane Buchanan • July 8, 2025
The idea of owning a vacation home—your own cozy escape from everyday life—is a dream many Canadians share. Whether it’s a lakeside cabin, a ski chalet, or a beachside bungalow, a second property can add lifestyle value, rental income, and long-term wealth. But before you jump into vacation home ownership, it’s important to think through the details—both financial and practical. Start With Your 5- and 10-Year Plan Before you get swept away by the perfect view or your dream destination, take a step back and ask yourself: Will you use it enough to justify the cost? Are there other financial goals that take priority right now? What’s the opportunity cost of tying up your money in a second home? Owning a vacation home can be incredibly rewarding, but it should fit comfortably within your long-term financial goals—not compete with them. Financing a Vacation Property: What to Consider If you don’t plan to pay cash, then financing your vacation home will be your next major step. Mortgage rules for second properties are more complex than those for your primary residence, so here’s what to think about: 1. Do You Have Enough for a Down Payment? Depending on the type of property and how you plan to use it, down payment requirements typically range from 5% to 20%+ . Factors like whether the property is winterized, the purchase price, and its location all come into play. 2. Can You Afford the Additional Debt? Lenders will calculate your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to assess whether you can take on a second mortgage. GDS: Should not exceed 39% of your income TDS: Should not exceed 44% If you’re not sure how to calculate these, that’s where I can help! 3. Is the Property Mortgage-Eligible? Remote or non-winterized properties, or those located outside of Canada, may not qualify for traditional mortgage financing. In these cases, we may need to look at creative lending solutions . 4. Owner-Occupied or Investment Property? Whether you’ll live in the home occasionally, rent it out, or use it strictly as an investment affects what type of financing you’ll need and what your tax implications might be. Location, Location… Logistics Choosing the right vacation property is more than just finding a beautiful setting. Consider: Current and future development in the area Available municipal services (sewer, water, road maintenance) Transportation access – how easy is it to get to your vacation home in all seasons? Resale value and long-term potential Seasonal access or weather challenges What Happens When You’re Not There? Unless you plan to live there full-time, you'll need to consider: Will you rent it out for extra income? Will you hire a property manager or rely on family/friends? What’s required to maintain valid home insurance while it’s vacant? Planning ahead will protect your investment and give you peace of mind while you’re away. Not Sure Where to Start? I’ve Got You Covered. Buying a vacation home is exciting—but it can also be complicated. As a mortgage broker, I can help you: Understand your financial readiness Calculate your GDS/TDS ratios Review down payment and lending requirements Explore creative solutions like second mortgages , reverse mortgages , or alternative lenders Whether you’re just starting to dream or ready to take action, let’s build a plan that gets you one step closer to your ideal getaway. Reach out today—it would be a pleasure to work with you.