How to Buy a House With No Money Down in Canada

Many Canadians want to own homes, but they cannot secure down payments. It is possible to purchase a home with no money down--even in tough times.

First-time homebuyers, recent college graduates and people with sizable incomes but little savings are great candidates for no-money-down programs. Determine what you can afford.

Sometimes it's difficult to qualify for these programs, but once you know your options, you can own a home without breaking the bank.

Check with lenders about no-money-down programs. Many offer programs with easy qualifications, but others take a little bit of work.

If you do not qualify through the lender, consider borrowing your down payment from family.

Some lenders will finance the entire mortgage, but you need Private Mortgage Insurance (PMI). You will not have a down payment, but you will have a higher mortgage each month. Many homebuyers who choose 100 percent mortgages split them into two mortgages, creating a PMI loophole.

If you have life insurance, you can borrow against the policy for the down payment. Other financial avenues to consider include pensions or other retirement accounts in Canada.

Tips

  • Read the fine print and understand everything.

    Ask lenders for all your borrowing options.

    Compare lenders' options and rates.

Warnings

  • Don't let the lender fool you into thinking you can afford a home that you truly cannot. You know how far your money goes each month.