Down Payment Requirements in BC (2026): The Complete Buyer Guide
By Alex Dunbar, REALTOR · REAL Broker BC Ltd. · Updated April 2026 · 10min read
Watch the full video above, or read the 2026 BC-focused written version below.
How much down payment do I need in BC? Federal rules: 5% of the first $500,000 of purchase price, 10% on the portion $500K to $1.5M, 20% on any home at $1.5M+. On an $850,000 Fraser Valley home, the minimum is $60,000. Most Fraser Valley first-time buyers put 5% to 10% down using a mix of savings, gifted funds, RRSP Home Buyers' Plan, and the new FHSA. Below are the rules, the sources, and the math that keeps you from over-saving and missing the market.
AT A GLANCE
BC Down Payment Numbers That Matter
MIN DOWN UNDER $500K
5%
On the first $500,000 of purchase price. Below $500k total, the entire down payment minimum is 5%.
MIN DOWN $1M HOME
$75,000
5% on first $500k = $25k, plus 10% on next $500k = $50k. Total $75k minimum on a $1M home.
MIN DOWN $1.5M+
20%
No exceptions above $1.5M. A $1.6M home requires $320,000 minimum down. This is a hard cap.
Federal minimum down payment rules apply to all of Canada. BC adds Property Transfer Tax + first-time buyer relief on top.
In This Guide
Down Payment Rules + Sources + BC Programs
Down Payment vs Closing Costs (Two Different Buckets)
First-time buyers conflate these two and run short at completion. They are entirely separate cash requirements:
Down payment: the equity stake you put into the property at completion. Sets your starting loan-to-value ratio. Required by the lender as a condition of the mortgage. Sourced from savings, gift, RRSP HBP, FHSA, or sale of another property.
Closing costs: a separate 2% to 4% (resale) or 3% to 6% (pre-sale / new construction) of purchase price covering Property Transfer Tax, legal fees, title insurance, adjustments, and strata move-in fees. Cannot be rolled into the mortgage. See the full closing costs guide for the line-by-line breakdown.
$850K SURREY EXAMPLE
Buyer puts 20% down ($170,000) plus closing costs ($20,000) = $190,000 cash needed at completion. Or 5% down ($42,500) + CMHC insurance added to mortgage + closing costs ($20,000) = $62,500 cash needed. The 5% structure gets a Fraser Valley first-time buyer into a townhome 2 to 4 years sooner than the 20% structure.
Minimum Down Payment by Purchase Price
Federal rules in tiers, applied cumulatively across the price:
- 5% on the first $500,000 of purchase price
- 10% on the portion from $500,000 to $1,500,000
- 20% on the entire price if the property is $1,500,000 or more
Worked examples for typical Fraser Valley price points:
| $450,000 condo | $22,500 (5%) |
| $700,000 townhome | $45,000 (5% + 10%) |
| $850,000 townhome | $60,000 (5% + 10%) |
| $1,000,000 detached | $75,000 (5% + 10%) |
| $1,400,000 detached | $115,000 (5% + 10%) |
| $1,500,000+ (any) | 20% (no exceptions) |
The $1,500,000 cliff is real. A $1,499,000 home requires $115,000 down. A $1,500,000 home requires $300,000 down. The $1,000 price difference creates a $185,000 cash difference. If you are negotiating near this threshold, know that the seller has the same incentive you do to land just under it.
7 Sources for Your Down Payment
Most BC buyers blend 2 or 3 sources. The strongest combination for first-time buyers in 2026: TFSA + FHSA + HBP + parental gift, layered in that order. The sources stack; you do not have to pick one.
1. Personal Savings
The source: Cash sitting in your chequing, savings, or HISA.
How it works: The cleanest down-payment source. No paper trail beyond 90 days of statements showing the funds are yours. No tax implications. No repayment.
What to watch for: Lenders look for stability. A balance that's been growing steadily over 6+ months is preferred over a sudden lump-sum deposit. Move funds OUT of high-yield savings to a regular chequing account 7 to 10 days before completion to avoid wire-transfer holds.
2. TFSA Withdrawal
The source: Withdraw from your Tax-Free Savings Account.
How it works: TFSA withdrawals are tax-free and re-contribution room is restored on January 1 of the following year. No special program required, just request the withdrawal from your bank or brokerage. 1 to 5 business days to settle.
What to watch for: Plan TFSA withdrawals BEFORE December 31 if you want to re-contribute the same amount on January 1 without using new contribution room. Withdrawing $50,000 in November lets you re-deposit $50,000 in January (in addition to the new annual room).
3. FHSA (First Home Savings Account)
The source: Tax-deductible contributions, tax-free withdrawals on first home.
How it works: New as of 2023. Contribute up to $8,000 per year, lifetime $40,000. Contributions are tax-deductible like an RRSP. Qualified withdrawals for a first home are tax-free, never repaid. The single most powerful first-time buyer tool introduced in the last 20 years.
What to watch for: Couples can each maintain an FHSA. Two FHSAs at $40,000 each = $80,000 of fully tax-advantaged down payment, no repayment. Open the account even if you can only fund $1,000/month; the contribution room carries forward (up to $8,000/year carry-forward).
4. RRSP Home Buyers' Plan (HBP)
The source: Withdraw up to $60,000 tax-free from your RRSP.
How it works: First-time buyer program (and certain re-buyers). Withdraw up to $60,000 from your RRSP tax-free for the down payment. Couples each get $60,000 = $120,000 combined. Funds must have been in the RRSP 90 days before withdrawal. Repayment is over 15 years, starting in year 2.
What to watch for: HBP STACKS with FHSA. A couple maxing both: $200,000 tax-advantaged down-payment power. HBP repayments are mandatory; missing a year converts that year's required repayment to taxable income. Set up automatic monthly RRSP contributions year 2+ to handle the repayments.
5. Gifted Funds from Family
The source: A gift from immediate family (parents, grandparents, siblings).
How it works: All Canadian A-lenders accept gifted down payments from immediate family. The lender requires a signed gift letter stating the funds are a true gift, not a loan, with no repayment expected. The giver's name, relationship, and gift amount are documented.
What to watch for: Funds typically must arrive in your account 30 to 90 days before completion to satisfy anti-money-laundering rules. A gift wired the morning of completion can flag and delay funding. Plan the gift transfer 90+ days out where possible.
6. Sale of Another Property
The source: Equity from selling your existing home (move-up buyers).
How it works: For move-up buyers, the most common down-payment source is the net proceeds from selling your existing home. Two structures: (a) sell first, rent for the gap, then buy; (b) buy first with subject-to-sale, sell within the subject window, complete both. Bridge financing covers the case where the new home completes before the old one closes.
What to watch for: Net proceeds = sale price minus mortgage payout minus selling costs (REALTOR fees ~3% to 5%, legal $1,500). On a $900,000 sale with $300,000 mortgage, expect roughly $560,000 to $570,000 net to your next purchase.
7. Borrowed Down Payment (Last Resort)
The source: Borrowed funds via line of credit or alternative lender.
How it works: A-lenders generally do NOT allow borrowed down payments. B-lenders and specific alternative-lender products allow it at materially higher rates and tighter qualifying. Personal loans or LOC used for down payment also raise your debt servicing ratios, which can reduce the mortgage you qualify for.
What to watch for: The math almost never works. If you cannot save 5% to 10% organically, the responsible move is to wait, not to manufacture the down payment with debt. Ask a mortgage broker before exploring this path; they will tell you honestly whether it makes sense for your specific file.
CMHC Default Insurance: The Math
If your down payment is less than 20%, the mortgage is "high-ratio" and must be insured by CMHC, Sagen, or Canada Guaranty. The premium is added to the principal and amortized over the life of the mortgage. Premium rates by down-payment tier:
| 5% to 9.99% down | 4.00% premium |
| 10% to 14.99% down | 3.10% premium |
| 15% to 19.99% down | 2.80% premium |
| 20%+ down | No insurance required |
PST on the premium (7% in BC) is due at closing in cash; the premium itself is rolled into the mortgage.
Worked example: $850,000 home, 5% down ($42,500), $807,500 mortgage. CMHC premium 4% of $807,500 = $32,300. New mortgage principal $839,800. PST on premium ($32,300 x 7%) = $2,261 due at closing in cash. Monthly payment increase from the premium addition: roughly $190 at 5% over 25yr.
The premium feels expensive but the alternative (waiting 2 to 5 years to save 20%) usually costs more in foregone appreciation. Run the math both ways with your mortgage broker before deciding.
How the Stress Test Affects Your Down Payment Strategy
The B-20 stress test (qualifying at the GREATER of contract rate +2% OR ~5.25%) caps your maximum mortgage. Down payment size affects the stress test in 2 ways:
Larger down payment = smaller mortgage = easier to pass: a 20% down structure on $850,000 = $680,000 mortgage. A 5% down structure = $807,500 mortgage. The stress-test qualifying payment on the larger mortgage is $940 to $1,100 higher monthly. Same income, smaller affordability range.
Some uninsured products skip the stress test: certain credit-union mortgages on conventional (20%+ down) files are exempt from B-20. Worth asking a broker if you have 20%+ down and your insured-rate file is borderline. See the mortgage pre-approval guide for the full B-20 walk-through.
BC First-Time Buyer Programs
Three programs reduce your effective down-payment requirement or improve the math for first-time BC buyers:
BC First-Time Home Buyers (FTHB) PTT exemption: not a down-payment program directly, but a $5,000 to $15,000+ savings on Property Transfer Tax that frees up cash you can put toward down payment instead. Properties up to $500,000 fully exempt; partial sliding scale to $835,000.
FHSA (federal): $40,000 lifetime contribution room per person. Tax-deductible going in, tax-free coming out for a qualified home purchase. Single most powerful tool for buyers under 40 saving for a down payment.
RRSP Home Buyers' Plan (federal): $60,000 per person tax-free withdrawal from RRSP, repayable over 15 years. Can be combined with FHSA. A couple maxing both gets $200,000 of tax-advantaged down-payment power.
Common Mistakes to Avoid
- Conflating down payment with closing costs: they are 2 separate cash buckets. A buyer with $170,000 saved for 20% down on $850k still needs another $20,000 for closing costs. Plan for both.
- Waiting to save 20% in a rising market: in most Fraser Valley scenarios, the foregone appreciation while waiting outpaces the CMHC insurance premium. Run the math both ways before committing to "20% or bust".
- Missing the FHSA window: if you opened the account on Jan 1, you have $8,000 of room that year. If you wait 3 years, you have lost $24,000 of tax-deductible contribution room you can never recover. Open the account NOW even if funded gradually.
- Withdrawing RRSP without using the HBP: a regular RRSP withdrawal is fully taxable. The HBP withdrawal is tax-free. Same dollars, completely different tax outcome. Always use HBP for first-home purchases.
- Receiving a gift wire 5 days before completion: anti-money-laundering rules require funds to be in your account 30 to 90 days before closing. A late gift can collapse the deal at funding. Plan gift transfers 90+ days out.
- Ignoring the $1.5M cliff: a $1.499M home requires $115k down. A $1.500M home requires $300k. Negotiate hard if you are anywhere near $1.5M; the cash impact is enormous.
- Skipping mortgage default insurance to save fees on a borderline file: some buyers stretch to 20% down then under-fund their emergency reserve. A robust 5% to 10% down + healthy reserves is usually safer than a stretched 20% down + zero buffer.
Frequently Asked Questions
What is the minimum down payment in BC?
In BC, federal rules apply to all of Canada: 5% on the first $500,000 of purchase price, 10% on the portion from $500,000 to $1,500,000, and 20% on any property at $1,500,000 or higher. On an $850,000 Fraser Valley home, that is $25,000 (5% of $500k) + $35,000 (10% of $350k) = $60,000 minimum down. At $1,000,000 the minimum is $75,000. Above $1.5M you must put 20% down which on a $1.6M home is $320,000.
Should I put 20% down to avoid CMHC insurance?
It depends. CMHC default insurance adds 2.8% to 4.0% to your mortgage principal at less than 20% down. On a $700,000 mortgage that is $20,000 to $28,000 amortized over 25 years. Versus saving for 20% down you delay your purchase 2 to 5 years in a market that historically appreciates 3% to 6% per year. Most Fraser Valley buyers come out ahead buying sooner with default insurance than waiting to save 20%. The exception: if 20% down lets you skip the stress test or qualify for materially better rates, the math may flip.
Can I use my RRSP for the down payment?
Yes. The Home Buyers' Plan (HBP) lets a first-time buyer withdraw up to $60,000 from their RRSP (recently increased from $35,000). A couple can withdraw up to $120,000 combined. The withdrawal is tax-free if you repay it over 15 years starting in year 2 after withdrawal. The RRSP funds must have been in the account for 90 days before withdrawal. HBP is one of the most powerful first-time buyer tools in Canada.
What is the FHSA and how does it stack with the HBP?
The First Home Savings Account (FHSA) is a tax-sheltered account first-time buyers can contribute up to $8,000/year (lifetime $40,000), with contributions deductible like an RRSP and withdrawals tax-free like a TFSA. FHSA funds CAN be combined with HBP withdrawals on the same purchase. A couple maxing both: 2 x $40,000 FHSA + 2 x $60,000 HBP = $200,000 of tax-advantaged down-payment power, none of which has to be repaid (FHSA) or is repaid over 15 years (HBP).
Can my down payment be a gift from my parents?
Yes. Gifted down payments from immediate family (parents, grandparents, siblings) are accepted by all Canadian A-lenders. The lender requires a signed gift letter stating the funds are a true gift, not a loan, with no repayment expected. The gift letter typically must include the giver's name, relationship, gift amount, and confirmation of no repayment. Funds usually need to be in your account 30 to 90 days before completion to satisfy anti-money-laundering rules.
Do I need to show 90 days of bank statements?
Yes. Lenders require 90 days of bank statements from every account holding down-payment funds. They look for two things: confirmation the funds are yours (not a recent unverified deposit), and absence of new debt taken on to fund the down payment. Recent large deposits (over $1,000 to $2,000 typically) need a paper trail explaining the source. A $50,000 deposit from "Crypto-Exchange-XYZ" 30 days before closing will trigger questions.
Can I borrow my down payment?
A-lenders generally do NOT allow borrowed down payments (other than HBP and FHSA). Some specific products (B-lender, alternative-lender, specific credit-union programs) allow "borrowed down payment" structures, but at materially higher rates and tighter qualifying. Taking a personal loan or line of credit to manufacture a down payment also raises your debt servicing ratios, which can reduce the mortgage you qualify for. The math almost never works.
Does putting more than 20% down save me money?
Yes, in three ways. (1) You skip the CMHC default insurance premium (2.8% to 4% of mortgage). (2) You qualify for the lender's lowest "conventional" rate (sometimes 0.10% to 0.20% better than insured rates, but sometimes worse, varies by lender). (3) Smaller mortgage = less interest paid over 25 years. The trade-off: dollars locked in home equity instead of TFSA, RRSP, or FHSA. Run the math with your accountant for your specific tax bracket.
Buying in Surrey, Langley, or Maple Ridge?
I'll help you build a real down-payment + closing-cost plan before you write your first offer.
15-minute call, no pressure. We map your savings, FHSA / HBP eligibility, family-gift timing, and target purchase price band. Plus closing costs so you know the full cash needed at completion. Or download my free Buyer's Guide for the full prep checklist.
Alex Dunbar Personal Real Estate Corporation
REAL Broker BC Ltd. | Living in the Lower Mainland
I help Fraser Valley first-time buyers stack FHSA + HBP + family gifts the right way. Surrey, Langley, or Maple Ridge: let's plan your full down-payment + closing-cost runway before you write your first offer.
Featured Guides
Down payment thresholds, FHSA limits, and HBP rules are reviewed periodically by the federal government. Verify current rules with your mortgage broker or tax advisor before applying. This article is educational and does not constitute financial advice.
Categories
Recent Posts
GET MORE INFORMATION
