Recently I worked with a couple who was selling their home in northern BC and moving to the Okanagan. It had been many years since they applied for a mortgage as they had been in their home for over twenty years.

When we were looking at different options for them we discussed the minimum down payment they

would need. Because of the price difference between the two areas they were concerned they would

not have enough of a down payment to buy a home.

They didn’t realize they could get into a home (under $500,000) with five per cent down. They thought

they would need ten per cent at minimum.

I’ve run into a few people who thought the same thing. Not to age myself, but when the five per cent

down payment option was introduced it was initially available to first-time buyers only. That has changed over time.

What has also changed is the minimum down payment for homes priced over $500,000. The minimum down payment for homes priced over $500,000 is now five per cent of the first $500,000 plus ten per cent of the purchase price over $500,000.

As an example, if you are buying a home priced at $750,000 your minimum down payment will be

$50,000. Five per cent of $500,000 is $25,000. Ten per cent of the purchase price over $500,000 in this

example is another $25,000 (750,000 – 500,000 leaves 250,000 multiplied by ten per cent).

At price points over $1,000,000 this changes again. A minimum of twenty per cent is required. Some

lenders also use a sliding scale to calculate the required down payment for homes priced over

$1,000,000. Some lenders will require a down payment larger than twenty per cent as the price of the

home you are buying increases.

The minimum down payment can apply to a second residence as well. I am seeing more situations

where spouses live or work in different communities and rather than rent they are opting to purchase a second home.

If you have been holding off on a purchase thinking you need ten per cent down payment it will be

worth looking into exactly what you need for a down payment. Speak to a mortgage professional to find out exactly what you need to buy your next home.



Hope you enjoyed the Canada Day weekend!