How Much Down Payment Do You Need to Buy a Home in Canada?

Everyone talks about the 20% down payment as if it's the only option, and that myth stops a lot of people from buying. The truth is, the minimum down payment in Canada starts at just 5%, and if you're a first-time buyer in Nova Scotia, a brand new pilot program could bring that down to just 2%.

As a mortgage broker in Halifax, I sit down with buyers every day to figure out what they actually need. The answer depends on who you are, what you're buying, and where you are in your financial journey. Here's what you need to know.

Minimum Down Payment in Canada: 5%

The minimum down payment to buy a home in Canada is 5% of the purchase price. This applies if you are a Canadian citizen or permanent resident with good credit, or if you've been in Canada on a work permit for at least 12 months.

On a $500,000 home, that's $25,000. But here's what most people miss: the down payment is not the only money you need to save.

NEW: Nova Scotia's 2% Down Payment Pilot Program

If you're a first-time homebuyer in Nova Scotia, you may now qualify for a down payment as low as 2% through the province's new First-time Homebuyers Program, launched in February 2026. The province has partnered with credit unions across Nova Scotia to deliver this four-year pilot.

To qualify, you need a household income of $200,000 or less, a credit score of 630 or higher, and you must pass the CMHC stress test. The home price cap is $570,000 in Halifax Regional Municipality and East Hants, and $500,000 in the rest of the province.

On top of that, Nova Scotia's Down Payment Assistance Program offers an interest-free loan of up to 5% of the purchase price (up to $28,500 in HRM) to help cover your down payment. Combined with the federal Home Buyers' Plan, which lets you withdraw up to $60,000 from your RRSPs tax-free, there are real options to help you get into a home sooner than you think.

Closing Costs in Nova Scotia: The Hidden Expense

Down payment aside, you also need to budget for closing costs. In Nova Scotia, that includes land transfer tax (about 1.5% for residents), lawyer fees ($1,000 to $2,000), property tax adjustments, title searches, and home inspections ($400 to $500 or more).

If your property uses well water and septic, add those inspections too. Then factor in moving costs, your first oil or propane fill-up, and any time off work.

On average, closing costs run between 2.5% and 3% of the purchase price. So while the minimum down payment is 5%, you should realistically budget closer to 8% to feel comfortable. With the new 2% pilot program, that total drops to around 5% all-in, which is a significant difference for first-time buyers.

When You Need 10% Down

A 10% down payment is required when buying a property with two or more units, when qualifying through a stated income program for self-employed buyers, or if you're new to Canada and don't yet meet standard credit or income history requirements.

The higher down payment offsets the additional risk the lender takes on. Closing costs still apply on top of this.

When You Need 15% or 20% Down

A 15% down payment comes into play when purchasing a three- or four-unit property or a higher-value home.

At 20% down, you reach the threshold to avoid mortgage default insurance entirely. This is the target for most investors and experienced buyers because it opens up more lending options.

What Is Mortgage Default Insurance (CMHC Insurance)?

Any time you put less than 20% down in Canada, you pay mortgage default insurance. This protects the lender if you stop making payments, but you're the one paying for it.

At 5% down, the insurance premium is about 4% of your mortgage amount, and it gets added to your loan. So on a $500,000 home with $25,000 down, your mortgage isn't $475,000. It's closer to $494,000 after insurance is added.

Here's what surprises most people: putting 20% down doesn't always save you money. Without default insurance, lenders see you as higher risk and may charge a slightly higher interest rate. In many cases, it makes more sense to put 19% down, pay a small insurance premium, and lock in the lower insured rate. Your mortgage broker can run those numbers for your specific situation.

Why You Should Talk to a Broker, Not an App

Online mortgage calculators and banking apps can give you a quick estimate, but they can't give you an accurate picture. A proper pre-approval takes hours behind the scenes: gathering documents, talking to lenders, and figuring out which programs you qualify for.

I've seen buyers get a quick pre-qualification from an app, make an offer, and then find out they don't actually qualify when it's time to finalize the mortgage. That can mean losing your deposit and the home you thought was yours.

Every buyer's situation is different. Sit down with a mortgage broker who will take the time to build a real plan for you.

Watch the Full Episode

This post is based on a recent episode of our podcast where we dive deeper into down payments, closing costs, and how to prepare financially for buying a home in Canada.

Watch: How Much Down Payment Do I REALLY Need? 5%, 10% or 20%?

Ready to Find Out What You Can Afford?

Whether you're a first-time buyer wondering about Nova Scotia's new 2% down payment program, or you're looking at your next investment property, I can help you figure out your best path forward. Let's talk.

Sources:

• Nova Scotia First-Time Homebuyers Program

• CBC: Down payment drops to 2% under N.S. pilot

Helen Gonda

Associate Mortgage Broker

[email protected]

gondamortgages.com