Real estate blog

Buying a home in Canada can feel difficult when you have a stable income but have not saved enough money for a traditional down payment. For many prospective buyers, the down payment is one of the biggest barriers to entering the real estate market.

But what if you do not have enough cash sitting in your savings account?

There are strategies that may help reduce the amount of your own money required upfront. However, it is important to understand the difference between buying a home with no personal savings used for the down payment and getting a true zero-down mortgage. In Canada, standard insured mortgage rules generally require a minimum down payment, while some programs and financing arrangements can help eligible buyers obtain the required funds.

As a real estate professional, I believe the first step is to understand your available options and the financial responsibilities that come with each one.

Is It Possible to Buy a Home With No Down Payment?

The idea of purchasing a home with no down payment can mean different things.

A buyer may have little or no money saved personally but obtain assistance through a qualifying program, receive a financial gift from family, use available financial resources, or purchase a property jointly with another person.

However, buyers should not assume that every lender offers zero-down financing or that a lender will automatically accept borrowed money as a down payment. Eligibility depends on the lender, the buyer's financial profile, the property, and applicable mortgage rules.

1. Explore Government and Local Assistance Programs

One of the first places to look is government or municipal homeownership assistance.

Depending on where you live and whether you meet the eligibility requirements, programs may provide financial assistance that can help with the upfront cost of purchasing a home.

Some programs may be structured as loans, forgivable loans, grants, or other forms of assistance. Availability, income requirements, property requirements, and repayment conditions can vary by location.

For example, current 2026 information highlights municipal programs that may provide substantial assistance to eligible buyers in specific Canadian communities.

Before counting on a program, check the current eligibility requirements and confirm whether the assistance can be used toward your required down payment.

2. Consider a Gift From Family

Another option available to some buyers is receiving a financial gift from an immediate family member.

A gifted down payment can provide the funds needed to meet the lender's minimum down-payment requirement without the buyer having to accumulate the entire amount personally.

However, lenders may have specific requirements regarding gifted funds. Buyers should document the source of the money and confirm that the gift meets the lender's rules.

It is also important for families to clearly understand that a genuine gift and a repayable loan are not necessarily treated the same way by a mortgage lender.

3. Use Available RRSP Resources

First-time buyers may also have access to registered savings through the Home Buyers' Plan, subject to the applicable federal rules.

The Home Buyers' Plan allows eligible individuals to withdraw money from their RRSP to help purchase or build a qualifying home, with repayment requirements applying afterward. Current federal rules have increased the withdrawal limit to $60,000 for eligible participants.

This is not the same as receiving a free down payment. You are using your own retirement savings and must understand the repayment obligations.

If you are considering this approach, review the current government requirements before making a withdrawal.

4. Consider Buying With Another Person

Buying a home with another person can also change how the purchase is financed.

For example, two buyers may combine their savings, income, and borrowing capacity to purchase a property together.

This arrangement can be used by spouses, family members, friends, or other co-buyers, depending on the circumstances.

However, co-ownership should not be treated casually. Before purchasing together, discuss ownership percentages, mortgage responsibilities, maintenance expenses, what happens if one person wants to sell, and how future proceeds would be divided.

A written legal agreement can help clarify each person's responsibilities.

5. Look at Borrowing Options Carefully

Some buyers consider using a personal loan or line of credit to obtain money for a down payment.

This approach can sometimes be accepted depending on the lender and the buyer's overall financial situation. However, borrowed money creates another debt obligation.

The additional monthly payment can affect your debt ratios and mortgage qualification. Centris notes that using borrowed funds for a down payment can increase a buyer's debt burden and may affect whether a financial institution approves the mortgage.

Therefore, simply finding a way to obtain the down payment does not automatically mean you can comfortably afford the home.

6. Consider a Gift of Equity

A gift of equity can be another possibility in certain family transactions.

This may occur when a family member sells a property to another family member for less than its market value. The difference between the property's market value and the agreed purchase price may represent equity that can contribute to the buyer's purchase.

Because this type of transaction has specific lending, legal, and tax considerations, buyers should obtain professional advice before proceeding.

7. Consider Buying With Multiple Buyers

Another approach is purchasing a property with more than one buyer.

Instead of one person being responsible for the entire down payment, multiple purchasers can contribute toward the purchase.

This can reduce the amount each person needs to provide individually. However, all buyers should understand that sharing ownership also means sharing financial responsibilities.

Before entering into such an arrangement, discuss mortgage payments, property taxes, insurance, repairs, maintenance, ownership percentages, and exit arrangements.

8. Remember That Closing Costs Still Exist

One of the biggest mistakes a buyer can make is assuming that finding a way to cover the down payment means they need no cash at all.

A home purchase can involve other expenses, including:

• Legal fees

• Home inspection costs

• Property taxes and adjustments

• Land transfer taxes where applicable

• Appraisal costs

• Moving expenses

• Home insurance

• Utility setup costs

• Other closing expenses

These costs can add up quickly.

That is why I recommend preparing a complete purchase budget rather than focusing only on the down payment.

9. Get Mortgage Pre-Approval Before Shopping

If you are exploring ways to purchase a home without using your own savings for a traditional down payment, mortgage pre-approval becomes particularly important.

A mortgage professional can review your income, credit history, existing debts, available funds, and potential sources of down-payment assistance.

This can help determine which options may actually be available to you.

Do not make an offer based solely on the assumption that a particular financing strategy will work. Confirm your financing position first.

10. Understand the Long-Term Cost

Reducing your upfront cash requirement does not necessarily make a home cheaper.

A buyer should consider the total cost of ownership, including mortgage payments, interest, property taxes, insurance, maintenance, utilities, and unexpected repairs.

If you borrow money to cover your down payment, you may also have another debt payment to manage.

The goal should not simply be to find a way to enter the market. The goal should be to purchase a home that you can reasonably afford over the long term.

Final Thoughts From Jag Sidhu

Buying a home without having a large amount of personal savings available for a down payment can be challenging, but there are several avenues worth investigating.

Government and municipal assistance, eligible RRSP resources, gifted funds, co-purchasing, and certain financing arrangements may help some buyers reduce the amount of their own cash required upfront. However, each option has eligibility requirements and financial consequences.

My advice as a real estate professional is to understand the financing first and the property second. Know how much you can afford, understand where your down payment will come from, budget for closing costs, and speak with qualified mortgage and financial professionals before committing to a purchase.

The right strategy is not simply the one that gets you into a home with the least cash upfront. It is the one that allows you to become a homeowner while keeping your overall finances manageable.

Frequently Asked Questions

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

A true zero-down mortgage is generally not the standard route for buying a home in Canada. However, some buyers may reduce the amount of their own cash needed upfront through eligible assistance programs, gifted funds, co-purchasing arrangements, or other financing strategies. Eligibility depends on the buyer, lender, property, and applicable rules.

2. Can my family give me money for a home down payment?

Yes, a financial gift from an eligible family member may be accepted by some lenders as a source of down-payment funds. The lender may require documentation confirming that the money is a genuine gift and does not need to be repaid.

3. Can I borrow money for my down payment?

In some circumstances, borrowed funds may be considered, but this can affect your debt obligations and mortgage qualification. A lender will assess your overall financial situation before determining whether the arrangement is acceptable.

4. Can I use my RRSP to help buy my first home?

Eligible first-time buyers may be able to use the federal Home Buyers' Plan to withdraw qualifying funds from an RRSP. The withdrawal is subject to program conditions and repayment requirements.

5. Are there government programs that can help with a down payment?

There are federal, provincial, and municipal programs that may provide assistance to eligible homebuyers. Programs can differ significantly by location, income, property type, and buyer circumstances, so current eligibility should be checked before relying on any particular program.

6. Can two people buy a home together if neither has enough savings for the down payment?

Two or more buyers may be able to purchase a property together and combine their financial resources. However, everyone involved should understand their mortgage, ownership, payment, maintenance, and legal responsibilities before entering into a co-ownership arrangement.

7. Do I still need money for closing costs if I don't have a down payment?

Yes. Even if a buyer finds a way to cover or reduce the required down payment from their own savings, other purchase expenses can still apply. These may include legal costs, inspections, taxes, insurance, moving expenses, and other closing-related costs.

8. What is the first step if I want to buy a home with little or no savings?

Start by speaking with a qualified mortgage professional to understand your borrowing capacity and possible sources of down-payment funds. Then create a complete budget that includes both the purchase price and the ongoing costs of homeownership.