Can You Buy a House With 5% Down in 2026?

For many Canadians, saving enough money for a home purchase can feel like the biggest obstacle to becoming a homeowner. With home prices, closing costs, moving expenses, and other costs to consider, saving a large down payment can take years.

But can you buy a house with only 5% down in Canada in 2026?

Yes, in many cases, you can. The minimum down payment depends on the purchase price of the property. For homes priced at $500,000 or less, the minimum down payment is generally 5% of the purchase price. For homes priced above $500,000 but below $1.5 million, the minimum is calculated as 5% of the first $500,000 and 10% of the portion above $500,000. Properties priced at $1.5 million or more generally require a minimum 20% down payment.

As a real estate professional, I believe understanding these rules before you start looking at homes can help you set a realistic budget and prepare for the purchase with greater confidence.

What Does a 5% Down Payment Mean?

A down payment is the amount of money you contribute toward the purchase of a home upfront. The remaining amount is generally financed through a mortgage.

For example, if you purchase a home for $400,000 and qualify for the minimum 5% down payment, your down payment would be:

$400,000 × 5% = $20,000

You would then finance the remaining amount through a mortgage, subject to lender approval and other requirements.

A 5% down payment can make homeownership more accessible because you do not necessarily need to save 20% of the purchase price before buying.

However, having the minimum down payment does not automatically mean you will qualify for a mortgage. Lenders also consider factors such as income, debts, credit history, housing costs, and your ability to pass the mortgage qualification requirements.

How Much Down Payment Do You Need in 2026?

The minimum down payment depends on the purchase price.

Homes Priced at $500,000 or Less

For a home priced at $500,000 or less, the minimum down payment is generally 5%.

For example:

• $300,000 home → $15,000 minimum down payment

• $400,000 home → $20,000 minimum down payment

• $500,000 home → $25,000 minimum down payment

This can make a significant difference for first-time buyers who are still building their savings.

Homes Between $500,000 and $1.5 Million

For homes above $500,000 but below $1.5 million, you cannot simply put down 5% of the entire purchase price.

Instead, the minimum is generally:

5% of the first $500,000 + 10% of the portion above $500,000.

For example, if you purchase a $700,000 home:

• 5% of the first $500,000 = $25,000

• 10% of the remaining $200,000 = $20,000

• Total minimum down payment = $45,000

For a $750,000 home, the minimum would generally be $50,000 under this calculation.

Homes Priced at $1.5 Million or More

For properties priced at $1.5 million or more, the minimum down payment is generally 20% of the purchase price.

This means buyers looking at higher-priced properties need substantially more money available before purchasing.

Does a 5% Down Payment Mean You Avoid Mortgage Insurance?

When your down payment is less than 20%, mortgage default insurance is generally required for an eligible insured mortgage. The insurance protects the lender against the risk associated with the mortgage; it does not protect the homeowner from damage to the property or replace home insurance.

The cost of mortgage insurance needs to be included when planning your overall home-buying budget.

This is one reason why buyers should look beyond the down payment itself. Your actual cost of buying a home includes much more than the initial amount you put toward the purchase.

Can First-Time Buyers Get a Mortgage With 5% Down?

Yes, qualifying first-time buyers may be able to purchase a home with 5% down, provided they meet the lender's requirements.

First-time buyers still need to demonstrate that they can manage the mortgage and other housing expenses. Lenders may look at income, employment, debts, credit history, down payment funds, and other financial information.

Mortgage qualification can also involve the mortgage stress test and debt-service calculations. Nesto's 2026 first-time buyer guide highlights the importance of understanding these qualification requirements before determining how much home you can afford.

So, having $25,000 saved does not necessarily mean you can purchase a $500,000 home. Your income and existing financial obligations also determine how much you may be able to borrow.

What Other Costs Should You Budget For?

One of the most common mistakes first-time buyers make is assuming the down payment is the only significant upfront cost.

You may also need money for:

• Home inspection

• Legal fees

• and transfer taxes

• Property insurance

• Appraisal or other lender-related costs

• Moving expenses

• Adjustments at closing

• Initial repairs or maintenance

• Mortgage default insurance, where applicable

RBC's first-time buyer guidance also highlights costs such as legal fees, land transfer taxes, home inspection, property insurance, utilities, maintenance, and repairs.

This means you should avoid putting every dollar of your savings into the down payment.

Having an emergency fund after closing can give you greater financial flexibility when unexpected expenses arise.

Can Newcomers to Canada Buy a Home With 5% Down?

Some newcomers may be able to qualify for a mortgage with as little as 5% down, depending on their circumstances and the lender's eligibility requirements.

For example, RBC currently advertises mortgage options for certain newcomers with down payments as low as 5%, along with mortgage pre-approval and other features. Eligibility depends on the applicant's circumstances and the lender's criteria.

Newcomers should be prepared to provide documentation relating to income, assets, debts, down payment funds, employment, and credit history. Depending on their situation, lenders may also consider financial information from their country of origin.

Is Putting 5% Down Always the Best Choice?

Not necessarily.

A smaller down payment allows you to enter the housing market sooner and keep more of your savings available. However, a larger down payment reduces the amount you need to borrow and can reduce your mortgage costs over time.

If you have enough savings for a larger down payment, compare the benefits of putting more money into the property against keeping some funds available for emergencies, investments, renovations, and other financial priorities.

The right choice depends on your overall financial situation rather than simply choosing the smallest possible down payment.

How Can You Prepare to Buy With 5% Down?

If you are planning to purchase a home in 2026, start by establishing a realistic budget.

Step 1: Check Your Savings

Determine how much you have available for the down payment and how much you can keep aside for closing and emergency expenses.

Step 2: Review Your Debts

Credit cards, car loans, student loans, and other debts can affect mortgage qualification.

Step 3: Understand Your Buying Power

A mortgage professional can help you understand how much you may qualify to borrow.

Step 4: Get Pre-Approved

Mortgage pre-approval can help you establish a realistic price range before you begin seriously shopping. RBC and Nesto both emphasize pre-approval as an important part of preparing for a first home purchase.

Step 5: Don't Forget Closing Costs

Keep additional money available for the costs that come with completing the purchase.

Step 6: Shop Within Your Budget

Once you know your approximate purchasing capacity, focus on homes that fit comfortably within your financial plan.

Final Thoughts

So, can you buy a house with 5% down in 2026? Yes, you may be able to, depending on the home's purchase price, your mortgage eligibility, and the applicable lending requirements.

For homes priced at $500,000 or less, 5% can be the minimum down payment. For higher-priced homes below $1.5 million, the minimum follows a tiered calculation, while homes priced at $1.5 million or more generally require 20% down.

But remember that buying a home is about more than saving the minimum down payment. You also need to consider mortgage qualification, insurance, closing costs, property taxes, maintenance, and your overall financial comfort.

My advice as a real estate professional is to plan your purchase around what you can comfortably afford, not simply the maximum amount a lender may approve. With proper preparation, a realistic budget, and the right professional guidance, a 5% down payment can be a possible starting point for eligible buyers looking to enter the Canadian housing market in 2026.

Frequently Asked Questions About Buying a Second Property in Canada

1. Can I buy a second property in Canada if I already have a mortgage?

Yes, it may be possible to purchase a second property while you still have a mortgage on your primary home. However, lenders will assess your income, existing debts, mortgage obligations, credit profile, available down payment, and ability to manage the additional financial commitment.

2. How much down payment do I need for a second property in Canada?

The required down payment depends on factors such as the type of property, its intended use, purchase price, and the lender's requirements. A second home for personal or vacation use may have different financing requirements from an investment property. It is best to confirm the requirements with your mortgage professional before making an offer.

3. Can I use the equity in my first home to buy a second property?

Potentially, yes. Homeowners may be able to access available equity in their existing property through certain borrowing options, such as a home equity line of credit or refinancing. The amount you can access depends on your financial circumstances, existing mortgage, property value, and lender requirements.

4. Can I buy a second property as an investment property?

Yes. A second property can be purchased as an investment with the goal of generating rental income or achieving long-term real estate growth. However, investment properties come with additional responsibilities, including maintenance, repairs, operating expenses, tenant management, and compliance with applicable local rules.

5. Can I rent out my second property?

You may be able to rent out a second property, but you should check local bylaws, zoning requirements, condominium rules, and applicable landlord-tenant regulations before doing so. Not every property can necessarily be used as a rental, and short-term rentals may have additional restrictions.

6. Is buying a vacation home different from buying an investment property?

Yes. A vacation or second home intended for personal use can have different financing considerations from an investment property purchased primarily for rental income. Lenders may have specific mortgage products and eligibility requirements depending on the property's intended use.

7. What costs should I consider when buying a second property?

Beyond the purchase price and mortgage, consider property taxes, home insurance, utilities, maintenance, repairs, closing costs, and potential property-management expenses. If the property is rented, you should also account for possible vacancy periods and ongoing rental-related costs.

8. Should I get pre-approved before buying a second property?

Yes. Getting pre-approved can help you understand your potential borrowing capacity and establish a realistic price range before you begin shopping. It can also help you plan your down payment and evaluate whether the second property fits comfortably within your overall financial situation.