Ask most Canadians what is standing between them and homeownership, and you will hear the same answer: the down payment.

The traditional advice says you need 20% down. On a $400,000 home, that is $80,000 in cash, before closing costs. Even the standard insured minimum of 5% means $20,000, plus thousands more for legal fees and land transfer tax. For renters already paying market rent every month, saving that kind of money can take the better part of a decade.

Here is the truth: you do not need 20%, and in many cases you do not even need 5%. Between government savings programs, insured mortgages, and newer options like rent to own (where you can get started with as little as 2% down, or $5,000), there are real, proven paths to owning a home with a low down payment in Canada.

This guide breaks down every option, what each one actually costs, and how to figure out which path fits your situation.

Key takeaways

• The minimum down payment for a traditional mortgage in Canada starts at 5% for homes $500,000 or less, but you will also need 1.5% to 4% more for closing costs.
• First-time buyers can stack the FHSA ($40,000 lifetime, tax-free) and the Home Buyers' Plan ($60,000 RRSP withdrawal) to boost a down payment, but only if they already have savings.
• With less than 20% down, mortgage default insurance is required on a traditional mortgage, costing up to 4.5% of your loan amount.
• Rent to own lets you move into your chosen home with as little as 2% down or $5,000, zero closing costs, and a credit score of 500 or higher, while part of every payment builds your down payment automatically.
• Your buyback price is protected, increasing only 5% per year, so if the market rises faster, you keep the extra equity.
• If you can comfortably afford the monthly payment but cannot clear the savings hurdle, rent to own gets you into your home now instead of renting for years while you save.

What is the minimum down payment for a house in Canada?

For a traditional mortgage, the minimum down payment depends on the purchase price:

• Homes $500,000 or less: 5% of the purchase price
• Homes between $500,000 and $1,499,999: 5% on the first $500,000, plus 10% on the portion above $500,000
• Homes $1.5 million or more: 20% minimum, with no mortgage insurance available

Here is what that looks like in dollars, compared to rent to own in Canada through Requity Homes:

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And remember, the traditional route also comes with closing costs of roughly 1.5% to 4% on top of the down payment, covering legal fees, land transfer tax, and title insurance. On a $400,000 home, that is another $6,000 to $16,000 you need in cash. If you want the full breakdown, see our guide on how much money you need to buy a house.

That gap between "what the bank requires" and "what you actually have saved" is exactly where alternative paths come in.

A quick word on mortgage default insurance

Any purchase with less than 20% down through a traditional lender requires mortgage default insurance (often called CMHC insurance, also offered by Sagen and Canada Guaranty). It protects the lender if you cannot pay, and it costs between roughly 0.6% and 4.5% of your mortgage amount, with smaller down payments carrying higher premiums. We covered the impacts of the new CMHC mortgage rules in detail if you want to dig deeper.

Two silver linings: insured mortgages often come with lower interest rates, and first-time buyers can now access 30-year amortizations on insured mortgages, which lowers monthly payments.

6 ways to buy a home with a low down payment

Here are six tips for buying a home with a lower down payment in Canada:

1. Save more and buy with the 5% minimum

The most common route: save 5%, pay the mortgage insurance premium, and get in the market. It works well if you have strong credit (600 or higher, realistically 640+ for smooth approvals), stable documented income, and enough saved to cover both the down payment and closing costs. If you are still building your savings, check out these 9 ways to save up for a down payment.

If you are missing any of those three requirements, keep reading.

2. Use the First Home Savings Account (FHSA)

The FHSA is the most tax-efficient way to save a down payment in Canada. Contributions are tax-deductible, growth is tax-free, and withdrawals for a first home are completely tax-free. You can contribute up to $8,000 per year, to a lifetime maximum of $40,000, and couples can each save $40,000.

If buying is even two or three years away for you, open one now. Every year you wait is contribution room you cannot get back.

3. Tap your RRSP through the Home Buyers' Plan

The Home Buyers' Plan lets first-time buyers withdraw up to $60,000 from an RRSP, tax-free, toward a home purchase. Couples can access up to $120,000 combined, and you repay it to your RRSP over 15 years. You can combine the HBP with your FHSA on the same purchase.

The catch: these programs only help if you already have money saved (or years to save it). If your challenge is not tax efficiency but the savings itself, you need a different tool.

4. Use gifted funds from family

Most lenders accept down payments gifted from immediate family, documented with a signed gift letter. This is how a large share of first-time buyers actually clear the bar. But not everyone has family who can help, and that should not lock you out of homeownership.

5. Stretch your amortization

First-time buyers and new-build purchasers can now stretch insured mortgages over 30 years instead of 25. This does not shrink the down payment, but it lowers monthly payments and boosts how much you qualify for, which helps buyers with modest savings but solid income.

6. Rent to own: get in now with 2% down

This is the option most guides leave out, and it is the one changing the game for buyers who can afford a monthly payment but cannot clear the savings hurdle. If you are new to the concept, our beginner's guide to how rent to own works is a good place to start.

With rent to own, you move into your chosen home now as a tenant, while a portion of every monthly payment goes directly into your down payment fund. The purchase price is locked in upfront, and you buy the home when you are mortgage-ready. For a deeper look at the mechanics, see how rent to own works in Canada.

At Requity Homes, here is what that looks like in practice:

• Start with as little as 2% down, or $5,000, whichever is higher. On a $400,000 home, that is $8,000 instead of $20,000 plus closing costs.
• Credit score of 500 or higher. Roughly half the score traditional lenders want to see. (Rent to own can also help you build credit while you are in the program.)
• Zero closing costs. We cover the lawyer fees, land transfer tax, and title insurance. You only pay for the home inspection.
• Automatic savings every month. Part of each payment builds your down payment fund, so saving is no longer a willpower exercise.
• Your price is protected. Your buyback price only increases 5% per year, even if the market rises faster. If prices jump 10%, that extra equity is yours.
• Full flexibility. Buy back anytime within the program (up to 3 years, with an average buy time of 18 months), or walk away with your accumulated savings if life changes.

You choose any home for sale in our service areas within the $150,000 to $600,000 range, and we buy it on your behalf. We serve Ontario, Alberta, Saskatchewan, and Manitoba, and you can browse available homes or learn what homes you can buy with Requity. You move in as the future owner, not just a renter.

The application takes about 5 minutes online, and full approval takes one business day once your documents are in. See how it works step by step, or try our rent to own affordability calculator to see your budget.

See how much home you qualify for with rent-to-own

Rent to own vs. traditional mortgage: which low down payment path fits you?

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We have a full breakdown of rent to own vs. a traditional mortgage if you want the detailed comparison. In short:

A traditional mortgage is the better fit if you have the savings, credit, and documented income to qualify today. Do not wait if you do not have to.

Rent to own is the better fit if you can comfortably afford the monthly payment but are blocked by the down payment, closing costs, credit score, or income that banks struggle to verify (self-employed mortgages are notoriously difficult to qualify for). Instead of renting for three more years while trying to save, you live in your future home and save automatically. It is why we call rent to own the realistic solution to your down payment problem.

‍Estimate your monthly rent-to-own payment

Don't forget the hidden cash requirements when buying a home

Whichever path you choose, know the full number upfront:

• Traditional purchase: down payment + legal fees + land transfer tax + title insurance + inspection + moving costs. First-time buyers can offset some of this with rebates and the federal Home Buyers' Tax Credit.
• Rent to own with Requity: your initial 2% (or $5,000) + the home inspection. That is it. We cover the rest.

This difference is often bigger than the down payment difference itself. It is why so many of our clients were "almost ready" for years before joining the program.

Buying a home with a low down payment is possible with rent to own

A low down payment does not have to mean a distant dream of homeownership. If you have the savings and credit, a 5% down insured mortgage with FHSA and HBP support is a solid path. But if the upfront cash, closing costs, or credit requirements are what is holding you back, rent to own was built for exactly your situation.

With Requity Homes, you can move into a home you chose yourself with as little as $5,000 upfront, zero closing costs, and a credit score of 500. Every payment builds your down payment automatically, and your price is locked in from day one.

Stop renting someone else's home. Start renting your future one.

Apply online for Requity Homes in only 5 minutes

Frequently asked questions (FAQs) about buying a home with a low down payment in Canada

Can I buy a house in Canada with no down payment?

Not through a standard mortgage; the legal minimum is 5% for homes under $500,000. The closest real alternative is rent to own, where Requity Homes lets you move into your home with 2% down or $5,000, whichever is higher, and no closing costs.

What credit score do I need for a low down payment home purchase?

Traditional insured mortgages generally require a score of at least 600, with better rates at 680+. Requity Homes accepts credit scores of 500 or higher, and the program gives you time to improve your credit score before you take out the mortgage.

What is a low down payment mortgage?

A low down payment mortgage is any home loan where you put down less than 20%, typically 5% to 19.99% of the purchase price. In Canada, that means an insured mortgage backed by CMHC, Sagen, or Canada Guaranty, with an insurance premium of 0.6% to 4.5% rolled into your loan. The upside is getting into the market years sooner, often at lower insured rates. And if even 5% plus closing costs is out of reach, rent to own with Requity Homes starts at just 2% down or $5,000, with zero closing costs.

How do I qualify for a low down payment mortgage?

You generally need a credit score of at least 600, stable provable income, debt ratios within limits (GDS up to 39%, TDS up to 44%), and an owner-occupied home under $1.5 million. The down payment must come from your own savings or a documented family gift, not borrowed funds. Missing a box or two? You can improve your credit score, top up savings with the FHSA or Home Buyers' Plan, or skip the bank's checklist entirely with rent to own, where Requity Homes approves credit scores of 500+ in one business day.

Does a larger down payment lower my monthly payment and interest rate?

Yes to the monthly payment, with a nuance on the rate. Putting more down means borrowing less and paying a smaller (or zero) insurance premium, which can cut payments by hundreds of dollars a month. On rates, insured mortgages (under 20% down) often get the lowest rates because the lender carries no default risk, so the real benefit of hitting 20% is avoiding the premium, not a better rate. The bigger question is timing: if saving from 5% to 20% takes five more years of renting, the payment savings may never catch the equity and price growth you missed.

Does having a co-signer lower your down payment?

No, a co-signer does not lower the minimum down payment in Canada. The 5% and 20% minimums are set by regulation and apply no matter who signs. What a co-signer does help with is qualification: their income can strengthen your debt ratios and offset weaker credit, at the cost of them taking full legal responsibility for your mortgage. If your barrier is the down payment itself rather than income, rent to own is the more direct fix: 2% down or $5,000, no co-signer needed, credit score of 500+.

How does rent to own actually work?

You pick a home for sale in our service areas. Requity Homes purchases it, and you move in with a small initial payment (2% or $5,000 minimum). Part of each monthly payment goes into your down payment fund. When you are mortgage-ready, you buy the home at your pre-set price, which only increases 5% per year. There is no minimum rental period, so you can buy back as soon as you qualify. You can review the details in our guide to rent to own agreements.

Can I combine the FHSA and Home Buyers' Plan with rent to own?

Yes. Because you are a first-time buyer when you eventually purchase the home, you can use FHSA savings and HBP withdrawals toward your buyback, on top of the savings you built during the program.