Buying your first home in Vancouver is a major milestone—and it all starts with understanding how much money you need upfront. The most important number to figure out? Your down payment.
This is the initial amount you pay toward the purchase price, and in British Columbia, it’s a big piece of your homeownership puzzle.
But how much is enough? Is it 5%, 10%, or 20%? The answer depends on your home’s price, your income, and a few provincial guidelines. Below, I break down the rules, options, and helpful tips every first-time buyer in BC should know.
Minimum Down Payment Requirements in BC
In Canada, including BC, the minimum down payment is set by federal law and looks like this:
- 5% of the purchase price on homes up to $500,000
- 10% on the portion of the price between $500,000 and $999,999
- 20% down is mandatory on homes $1,000,000 and above
Let’s break it down with a real-world example:
- If you’re buying a condo in Vancouver for $700,000, your down payment would be:
- 5% on the first $500,000 = $25,000
- 10% on the next $200,000 = $20,000
- Total: $45,000
For first-time buyers aiming below $1,000,000 million, the 5–10% rule means homeownership is within reach—but be aware, putting down less than 20% requires mortgage loan insurance (we’ll cover that below).
What If You Don’t Have 20% Down Payment?
If your down payment is under 20%, you’re required to get mortgage default insurance—often called CMHC insurance (named after the Canada Mortgage and Housing Corporation).
CMHC Insurance Explained
Here’s how CMHC Insurance works:
- The insurance protects the lender in case you default.
- You pay a premium, which is added to your mortgage amount.
- Premium rates vary, typically between 2.8% and 4.0% of your loan.
The less you put down, the higher your premium. It’s not ideal, but it allows you to buy sooner, with less saved upfront. This is an ideal solution when the Vancouver real estate market favours buyers.
Where Can Your Down Payment Come From?
In British Columbia, you’re allowed to fund your down payment from a few different sources:
- Savings (your own bank account, RRSPs, etc.)
- Gifted funds from an immediate family member (must be documented and non-repayable)
- First Home Savings Account (FHSA) – a new tax-free savings tool just for first-time buyers
- RRSP Home Buyers’ Plan (HBP) – withdraw up to $60,000 tax-free from your RRSP (must be repaid over 15 years)
Many buyers combine these tools—for example, using $20,000 from an RRSP and $15,000 from a FHSA. As long as it’s verified by your lender, it counts.
What About Closing Costs? Don’t Forget These Extras
A common mistake for first-time buyers in BC is saving just enough for the down payment and forgetting about closing costs.
Here’s what you might need to pay, in addition to your down payment:
- Property Transfer Tax (PTT) – 1–3% of the purchase price (note: first-time buyers may qualify for an exemption or partial exemption if the home is under $835,000)
- Legal fees and disbursements – $1,000–$2,000
- Appraisal and inspection – $400–$800
- Title insurance and adjustments – varies
- Moving costs – totally depends, but worth budgeting
So, if your goal is a $700,000 home, don’t just save $45,000 for the down payment. You may need an extra $7,000–$10,000 in closing costs to complete the purchase smoothly and stress free.
Tips to Reach Your Down Payment Goal Faster
Saving up in Vancouver isn’t easy, but it’s possible. Here are some smart tips to speed things up:
- Open an FHSA immediately – your contributions are tax-deductible and grow tax-free
- Use automated savings – set up bi-weekly transfers from your paycheque and put into a savings account
- Track your spending – apps like Mint or YNAB can show you where to cut back
- Ask your parents about gifting – it’s common, and lenders allow it (with documentation)
Final Thoughts on How Much Down Payment Do You Need to Buy a Home
If you’re serious about buying your first home in Vancouver, or any city for that matter, understanding your down payment is just the beginning. The right real estate agent can walk you through all the steps, from setting a savings goal to getting pre-approved to closing the deal.
If you’re not sure how much you need, where to start, or what’s realistic for your income, our agents at the Doma Group are happy to help. Let’s crunch some numbers together and create a clear game plan to make your first home a reality!