To buy your first home requires patience and diligence. It may take a few years to save enough for a down payment. As hard as it may be, it is worth the effort because homeownership is a good financial strategy for building wealth.

However, the question of the down payment is also one of the biggest hurdles that Canadians face towards home ownership. It can take from 6 to 10 years to save enough, depending on the cost of the property you wish to buy.

Mortgage regulations in Canada aim to ease the challenge of paying 20% for the down payment, the minimum requirement for conventional mortgages.  For a house with a selling price of $650,000, 20% will be $130,000, surely not an insignificant amount.

Hence, homebuyers in Canada can now buy a house with as little as 5% for the down payment, as long as the property is valued at $500,000 or less. For properties with a tag price above $500,000 but less than $1 Million, the amount in excess of $500,000 will need a minimum down payment of 10%.

You will find that you have several options for your down payment to enable you to buy a house sooner rather than later.

The less you have to borrow for your mortgage, the lower the interest you will be paying over the life of your mortgage.

Rising home prices in 2021 make it more difficult for homebuyers to save for a down payment.  In fact, the National Bank of Canada reported that in the 2^nd quarter of 2021, the affordability of housing has increased by the widest margin seen in 27 years.

To give you a better idea of how much you will need for your down payment, let’s take a look at the average costs of down payments in major cities in Canada.

Vancouver

The average home price in Vancouver for a detached home is $1,828, 200. This means that you need about $365,000 for a down payment, plus closing costs. Since the average price is above $1 Million, you need at least 20% for your down payment.

The average price for a townhouse is $963,000. You can buy a townhouse with at least 10%, or about $96,300 plus closing costs. A condo costs, on average, around $738,600.

Victoria

Home prices in Victoria are slightly lower than in Vancouver, with a standard home costing on average around $1.03 Million.

Thus, you need about $200,000 for your down payment plus closing costs.

Montreal

Housing affordability is much better in the province of Quebec. In Montreal, the average home price for a single-detached home is $500,000. Hence, if you save about 1/10 of your pre-tax income, it could take you as little as 3 years to save up for your down payment for a house.

You need about $100,000 for a 20% down payment plus closing costs for a conventional mortgage. The good news is that you can buy a house with as little as $25,000 in savings for a 5% down payment or $50,000 for a down payment of 10%.

A condo unit costs on average about $375,000 while a plex has a median selling price of $679,750.

Don’t forget you will need a little more to pay for closing costs such as legal fees, taxes, and transfer fees.

Quebec City

A representative home in Quebec City costs an average price of $373,000. You need a minimum of $18,650 for a down payment of 5% or $37,300 if you can afford a 10% down payment.

A conventional (uninsured) mortgage would require a 20% down payment of $74,600 plus closing costs.

The average price for condominiums went up by 31% in the 2^nd quarter of 2021 to reach $335,000.

Ottawa

A single-detached home in Ottawa costs around $702,155. It is possible to pay only 5% down payment for the first $500,000 or about $25,000 and 10% for the remaining balance (roughly around $20,000. Hence, you can buy a house with a minimum down payment of $45,000 plus closing costs.

If you wish to pay at least 20%, you need $140,431 plus closing costs.

A condo apartment sells for an average price of $425,362, which you can buy for $21,268 for a 5% down payment or $42,536 with a 10% down payment.

Toronto

Everybody knows that housing affordability is low in Toronto because home prices are skyrocketing. In the Greater Toronto Area, a single-detached home has an average price of $1,526,465, up by 20% from prices in the same period in 2020.

Thus, you will need at least $305,293 to pay for the 20% down-payment plus closing costs.

A condo apartment has a median price of $708,521, up by 12% from last year while a townhouse costs on average $1,016,269. A semi-detached home has a median price of $1,114,696, up by 21% from last year’s price.

Hamilton

A single-detached house in Hamilton has a median price of $874,925.  You can pay a down payment of 5% for the first $500,000 and 10% for the remaining balance. Hence, you need at least $62,492 for a minimum down payment plus closing costs.

A condo apartment has a median price of $480,947 which you can buy with as little as $25,000 for your down payment. A townhouse has a median price of $700,215 which will need about $45,021 for a minimum down payment.

Edmonton

In Edmonton, a single-family home has an average price of $453,011 as of Sept. 2021. This shows a 3% increase from the average price in the same period last year. You can buy a house with a 5% down payment of $22,650 or $45,301 with a 10% down payment.

A townhouse is more affordable at an average price of $337,236 while a condo has an average price of $224,212.

Calgary

A single-detached house in Calgary has a median price of $581,104. You can also pay only 5% for the first $500,000 or about $25,000 and 10% on the remaining balance. Thus, you can buy a single-family home if you have about $33,100 in savings.  

A townhouse has a median price of $315,975 while a condo apartment has a median price of $257,687.

While prices of detached homes increased by 3% compared to the same period last year, the prices of condo apartments and townhouses went down by 1% and 4%, respectively.

Winnipeg

Housing affordability is also higher in Winnipeg with the average cost of a detached home at $377,789. You can buy a house with a down payment of 5% at $18,889 or with a 10% down payment of $37,778 plus closing costs.

An attached house sells on average for $321,334 while a condo apartment has a median price of $258,770.

Real estate prices in Winnipeg went up by 7% for detached homes and 18% for attached homes. Condo apartment prices went up by 10% compared to last year.

Data was based on the Residential Property Index published by Statistics Canada.

 It is best to consult a mortgage expert who can help you explore your mortgage and down payment options. You can connect with the best mortgage brokers in your area using our short online form, free of charge!