If you’re looking for a trusted, experienced, and knowledgeable Regina mortgage broker, I am here to help. No matter what stage you are in the mortgage process, I can assist you in securing financing to get the home of your dreams. I also understand that all those mortgage rules and regulations surrounding the process can be confusing. My team and I are here to answer all your mortgage questions and take you to home ownership. In my latest tip, I share the information on what can be used as a down payment for a mortgage in Canada.

Do You Have An Eligible Mortgage Down Payment Towards A Mortgage?

When you’re ready to buy a home, one of the first steps is to secure a down payment. As a professional mortgage broker in Regina, I often get asked about how you can pull together the funds for this important milestone. The good news is that there are several options available. Whether dipping into your savings or tapping into specific programs, here are the key sources you can use for your down payment.

Savings

The most common source for a down payment is your savings. It’s straightforward and doesn’t involve borrowing from other sources, which can be beneficial when qualifying for a mortgage. Lenders prefer this option as it shows financial responsibility and long-term planning.

RRSP (Registered Retirement Savings Plan)

If you’re a first-time homebuyer, you can tap into your RRSP through the Home Buyers’ Plan (HBP). This government initiative allows you to withdraw up to $35,000 from your RRSP tax-free, provided you repay the amount within 15 years. Remember that any amount not repaid within the repayment period will be taxed as income, so plan accordingly.

FHSA (First Home Savings Account)

The First Home Savings Account (FHSA) is a newer tool designed to help Canadians save for their first home. Contributions to your FHSA are tax-deductible, similar to an RRSP, but withdrawals for purchasing a home are tax-free, like a TFSA. You can contribute up to $8,000 annually, with a lifetime limit of $40,000. If you’re just starting your savings journey, this could be a powerful way to grow your down payment funds faster.

Gifts from Family

A gift from a close relative can also be used for your down payment. Lenders generally allow this if it comes with a signed letter stating that the money is a gift and doesn’t need to be repaid. This is a popular option for many first-time homebuyers, especially those looking to secure a larger down payment to avoid mortgage insurance or to qualify for a better interest rate.

Selling Assets

If you own assets like a vehicle, investments, or other valuable items, selling these and using the proceeds for your down payment is also a valid option. However, lenders will typically require proof of the sale, including receipts and documentation showing the asset’s value. Be prepared to provide these documents during the mortgage application process.

Building up your down payment can take time and a combination of sources. Each option comes with its own benefits and considerations, and it’s important to plan out which makes the most sense for your financial situation. Whether you’re using savings, government programs like the FHSA and HBP, or even getting help from family, I can guide you through the process to ensure you’re well-prepared when it’s time to buy your home.

Feel free to reach out if you have questions about down payment options or need guidance on your home-buying journey! 

I enjoy helping people with all sorts of mortgage needs, from purchasing their first home, their forever home, helping them with their mortgage renewals, or mortgage refinancing to lower their mortgage interest rate. Regardless of need, it is wonderful to meet new people and help them make their lives better every day.