Downpayment Options

Downpayment options

What Are My Downpayment Options?

One of the biggest challenges of home ownership is saving the required downpayment.

Your lender will be looking for a minimum 5% down payment on your property.

There are generally 5 options available. Your down payment can come from more than one source.

Using Your Own Savings or Investments

One of the most straight forward down payment options is your own savings or investments.  You will need to provide recent 3 month bank statements to show the history of the savings.  It is required that the full amount of  savings for your down payment must be in the account for a minimum 90 days.

Your bank or investment statement must clearly show your name and account number. Sources for any large deposits outside of normal contributions will need to be explained.   Example: if you sold a vehicle within the last 90 days, you will need to provide an explanation or bill of sale if there is a large deposit from this sale.


Using RRSPs and the Home Buyer’s Plan

First time buyers can save on taxes. The Federal government allows First Time Buyers to withdraw up to $25,000 from their RRSP without having to pay withholding tax.  If you are not a first time buyer, you can use your RRSP, but taxes will apply.   First time homebuyers can recontribute these funds back to their RRSPs over 15 years.

Similar to your own savings/investments, your RRSP statement must clearly show your name and account number and be a recent statement.


Gifted Down Payment

An immediate family member can gift a downpayment.  Generally, the lender will ask for a gift letter.  The letter will need to confirm the relation to you and that the gift is non-repayable.  A borrower can provide a bank statement with the funds deposited.  Furthermore, this gifted downpayment should be deposited into your account approximately 10 days before closing.

Borrowed DownPayment

Homebuyers can borrow from a line of credit.  Borrowed downpayment advertises as no down payment, no problem! However, there are restrictions when using borrowed funds from a credit card or line of credit.  To qualify, borrowers must have a minimum 650 credit score, no credit issues and income that provides for a repayment amount for the borrowed funds.  Often lenders have a higher rate for those using a borrowed downpayment.


Proceeds From Selling Your Existing Home:

Your downpayment is coming from the sale of your existing home. This amount can be verified with a current mortgage statement and an unconditional purchase contract on your sale. Borrower show the equity in the home with these statements and contracts.  You will require a only min 5% down for the new purchase.  If you have extra equity, you have the option to use those extra funds to pay off debt or put into savings.


For more information on your downpayment options, contact Jacqueline Jeffries at 780.220.5968 or email at