Down Payment BC 2026: 5% Rule, Approval & Closing Cash
Short on time? Here’s the rule most newcomers get wrong. The minimum down payment in Canada is not a flat 5% of the price.
| Purchase price | Minimum down payment |
|---|---|
| $500,000 or less | 5% of the price |
| $500,000 to $1,499,999 | 5% of the first $500,000, plus 10% of the rest |
| $1,500,000 or more | 20% of the price |
This tiered rule is set federally and is the same in every province, as canada.ca’s down payment guide explains.
But saving the down payment is only step one. A bank still has to lend you the other 95%. And after closing day, you need money left over to actually live in the place. This post covers all three.
The mistake I made
I honestly thought “5% down” meant 5% of whatever the house cost.
So when I pictured an $800,000 townhouse, I thought: $40,000. Hard, but doable. The real minimum is $55,000. That $15,000 gap is a lot of extra months of saving for a family like ours.
Quick reminder: I’m sharing my own calculations as a renter planning a first purchase, not professional advice. The numbers below use assumptions you’ll need to swap for your own, and rules can change. A mortgage broker or your bank can run your real figures.
Real Victoria prices, real numbers
I used the September 2026 benchmark prices from the Victoria Real Estate Board for the Victoria Core area: about $547,800 for a condo, $829,400 for a townhouse and $1,280,100 for a single-family house.
| Condo $547,800 | Townhouse $829,400 | House $1,280,100 | |
|---|---|---|---|
| Minimum down payment | $29,780 | $57,940 | $103,010 |
| BC property transfer tax (regular) | $8,956 | $14,588 | $23,602 |
| PTT after first-time exemption | $956 | $6,588 | $23,602 (no exemption) |
PTT is generally 1% on the first $200,000 and 2% on the portion up to $2 million. BC’s first-time exemption covers the first $500,000 for homes priced up to $835,000, phases out by $860,000, and disappears above that. You can check your own number with the BC government’s PTT calculator.
For our family of five, the house column hurts twice: over $100,000 down, and no PTT break at all. Seeing it laid out like this is exactly why “start with a small condo” keeps coming up at our kitchen table.
Under 20% down? Add mortgage insurance
If your down payment is less than 20%, mortgage default insurance is mandatory. With 5% to 9.99% down, the premium is typically 4% of the loan.
On the condo example, a loan of about $518,000 means a premium of roughly $20,700. Most people add it to the mortgage, so it doesn’t come out of your pocket on day one. But you’ll pay interest on it for decades.
Part 1: Who Counts as a First-Time BuyerFHSA Canada 2026 Guidecanada.ca Down Payment Guide
Approval depends on income, not your down payment
Here’s what surprised me most. Having 5% saved doesn’t mean a bank will lend you the rest. Lenders care about one thing: can you make the payments every month?
They check two ratios. According to CMHC’s underwriting guidelines, your housing costs (GDS) generally can’t exceed 39% of gross income, and your housing costs plus all other debt payments (TDS) can’t exceed 44%.
And they don’t use your actual rate. They use the stress test rate: the higher of your contract rate plus 2%, or 5.25%. So if you’re offered 4%, the bank checks whether you could still pay at 6%.
Why condo buyers should pay attention
CMHC counts 50% of your condo fees as a housing cost in the GDS ratio, along with your mortgage payment, property tax and heating. A condo with high strata fees can shrink how much you’re allowed to borrow, even at the same price. (Part 3 covers strata fees in detail.)
You’ll also usually need a credit score of at least 600 for an insured mortgage.
What income does a $547,800 condo need?
I plugged rough assumptions into the 39% rule. Treat these as a template, not a quote.
| Monthly housing cost (assumptions) | Amount |
|---|---|
| Mortgage, about $539,000 incl. insurance, stress-tested at 6% over 25 years | about $3,450 |
| Property tax (assumed) | about $250 |
| Heating (assumed) | about $100 |
| 50% of a $500 strata fee | $250 |
| Total for the GDS test | about $4,050 |
| Household income needed at 39% GDS | about $125,000 a year |
Car loans and credit card balances count against the 44% TDS limit, so they can lower that number further. When I did this math, I stopped thinking of the down payment as “the hard part.”
The money nobody budgets for: your cash cushion
Say you’ve saved the exact minimum down payment. You’re still not ready.
Closing costs such as property transfer tax, legal or notary fees, a home inspection and title insurance typically add 1.5% to 4% of the purchase price. On a $547,800 condo, that’s roughly $8,200 to $21,900, on top of the down payment.
Then there are the costs that don’t show up in most calculators:
- Adjustments: you reimburse the seller for property tax or strata fees they prepaid.
- Home insurance: your lender will want proof before it releases funds.
- Moving and setup: renters often don’t own a lawnmower, a ladder or enough furniture for an extra room.
- First-year surprises: an inspection can’t catch everything in a resale home.
| Condo at $547,800 | Rough amount |
|---|---|
| Minimum down payment | $29,780 |
| Closing costs (1.5% to 4%) | $8,200 to $21,900 |
| Moving, setup and an emergency buffer | $5,000 to $10,000+ (my own target) |
| Cash you may actually need | about $43,000 to $62,000 |
My personal rule: if the furnace dies the month after we move in, I want to pay for it without touching a credit card.
Transparency note: the two links below are referral links. If you sign up through them, I may get a small bonus (and you may too), at no extra cost to you.
If you’re building your down payment in an FHSA or TFSA, you can open an account with Wealthsimple using my invite link or with Questrade using referral code 326222326497424.
Questions people ask me about this
Can my parents give us part of the down payment?
Often, yes. Many lenders accept a gift from close family if the giver signs a gift letter confirming it isn’t a loan. Rules vary by lender and insurer, so ask early, because the money usually needs to be in your account before closing.
Can first-time buyers choose a 30-year mortgage?
For insured mortgages, the usual maximum is 25 years, but first-time buyers and buyers of newly built homes can choose 30 years. Your monthly payment drops, but you’ll pay more interest overall.
Is this financial advice?
It isn’t. These are my own worked examples using public numbers and assumptions. A mortgage broker can tell you what you’d actually qualify for.
About the author: Annie has lived in BC for about a decade and is saving for her family’s first home the slow, spreadsheet-heavy way. She writes about money topics she’s working through in real time, mistakes included.
Bottom line
The 5% is a starting line, not a finish line. What you really need is a down payment calculated by tier, closing costs plus a cash cushion, and an income that passes the stress test. In Part 3, we’ll look at condos specifically: strata fees, presale risks and the documents to read before you sign.
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