Let’s run the real numbers on a $700K home.

20% down: $140,000.
Minimum down: about $45,000. That’s 5% on the first $500K and 10% on the rest.

That’s a $95,000 difference. For most first-time buyers, that’s years of saving.

The tradeoff with less than 20% down is mortgage default insurance. At this down payment, the premium is about 4% of your loan, so roughly $26,000 added to your mortgage, plus about $2,000 in PST paid on closing.

A few more things that can help first-time buyers:
FHSA: save up to $8,000 a year, up to $40,000 total, tax-free for your first home.
RRSP Home Buyers’ Plan: withdraw up to $60,000 from your RRSP for your down payment.
30-year amortization: first-time buyers with an insured mortgage can stretch their payments to lower the monthly cost.

Is 20% down better? It can be. Is it required? No. The right answer depends on your budget, your timeline and how much rent you’d pay while you keep saving.

If 20% has been holding you back, let’s run your actual numbers. You might be closer than you think.

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