The 5% Down Mortgage: Opportunity or Offside? A Mortgage Coach’s Take for Ontario Buyers

Introduction: You Don’t Need to Wait Until You’re “Ready”

If you've been sitting on the sidelines thinking you need a huge down payment to buy a home in Ontario—think again. Whether you're buying your first home or moving up to your next one, a 5% down payment mortgage could be the winning play.

In this post, I’ll walk you through who can use it, how much you really need, and the smart ways people are pulling together their down payments—without sitting out another season.

Who Can Use 5% Down? (Hint: It’s Not Just Rookies)

There’s a common myth that only first-time buyers can access 5% down mortgage options. That’s not true.

✅ First-time buyers can absolutely get in the game with 5% down.

✅ Move-up buyers may also qualify for 5% down if the mortgage is insured.

That means if you're selling your current home and buying a new one, you could still use a lower down payment strategy to keep more of your equity in your pocket—or put it toward renovations, debt repayment, or investing elsewhere.

How Much Do You Actually Need? (Let’s Crunch It)

The rules are simple:

• 5% down on the first $500,000 of the purchase price

• 10% down on any portion between $500,000 and $999,999

• As of recently, insured purchases up to $1.5 million are eligible (up from $1M)

Example 1: $500,000 Home

• 5% = $25,000

Example 2: $750,000 Home

• First $500K = $25,000 (5%)

• Remaining $250K = $25,000 (10%)

• Total = $50,000

Example 3: $1,200,000 Home

• First $500K = $25,000 (5%)

• Remaining $700K = $70,000 (10%)

• Total = $95,000

Compare that to the old rules, where anything over $1M required a full 20%—and the game has changed.

5 Down Payment Mortgage

Smart Ways to Fund a 5% Down Payment

If you don’t have the full down payment saved yet, that doesn’t mean the game’s over. Many buyers in Brantford, Norfolk County, Haldimand, and Oxford are getting creative—and strategic.

1. RRSP Home Buyers’ Plan (HBP)

First-time buyers can withdraw up to $35,000 per person from an RRSP without tax penalties to buy a home. That’s $70,000 for a couple—and it can be a game-changer.

You do need to repay it over 15 years, but it’s interest-free and gives you flexibility now.

2. First Home Savings Account (FHSA)

If you’ve opened a First Home Savings Account, you can contribute up to $8,000 per year (to a $40,000 lifetime limit) and withdraw it tax-free for your first home purchase.

This is one of the most powerful tools available to first-time buyers—combining the tax-deductible contributions of an RRSP with the tax-free withdrawals of a TFSA.

3. Gifted Down Payment from Family

Let’s be honest—many Canadian homebuyers use family support. A gifted down payment from a parent, grandparent, or even a sibling is perfectly acceptable under most mortgage programs.

There are some simple paperwork steps involved, but as long as the funds are a genuine gift (not a loan), they can be used for all or part of the down payment.

Pro tip: This is where having a coach helps. We make sure you’re setting things up correctly and not disqualifying yourself from lender approval.

Why 5% Down Still Works in Ontario

Despite rising home prices, many parts of our region still offer opportunity:

• Brantford, Norfolk, and Haldimand have average prices well below Toronto levels

• 5% down keeps your savings liquid for moving costs, updates, or emergencies

• It’s a fast-track to building equity instead of renting

The key? Treat your mortgage like a long-term strategy—not a short-term panic.

Just like a well-coached team doesn’t try to win the game on one play, smart mortgage planning looks at the full season—not just the first quarter.

Let’s Build Your Game Plan Together

5% down might not be the right play for everyone—but for many Ontario buyers, it’s a great way to get off the bench and into the real estate market.

As your mortgage coach, I help you:

• Understand your true affordability

• Plan the right down payment strategy (cash, RRSP, FHSA, gifts)

• Choose the best mortgage product for your goals

🏡 Book a free 30-minute strategy call
👉 Schedule here

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FAQs: 5% Down in Ontario

1. Can I really buy a home with only 5% down?

Yes—as long as the purchase price is $999,999 or less, or now even up to $1.5 million under new insured rules.

2. Do I need to be a first-time buyer to use 5% down?

No. Move-up buyers can also use 5% down if the mortgage is insured.

3. Can I use gifted money for the down payment?

Absolutely—many lenders accept gifts from immediate family with a simple gift letter.

4. How do RRSPs and the FHSA help?

You can withdraw up to $35,000 (per person) tax-free with the Home Buyers’ Plan, and FHSAs let you grow savings tax-free and withdraw tax-free.

5. Will I need mortgage insurance with 5% down?

Yes—but it's built into your mortgage and protects the lender. It also allows you to get in sooner, with less cash saved.

🏒 Final Word: Don’t Wait for the Perfect Shot—Take the Smart One

Buying with 5% down doesn’t mean settling. It means playing the long game smartly. With the right planning, strategy, and coaching—you can turn a small down payment into a big opportunity.

Ready to build your winning mortgage playbook? Let’s talk.