Can I get a mortgage with no down payment in Canada?

True zero down payment mortgages are not available from Canadian banks due to regulations, but you can borrow the down payment from another source if you qualify for both the mortgage and the loan.

How does borrowing a down payment work?

You can purchase a home by borrowing the required down payment from a separate lender, such as a line of credit or personal loan, allowing you to cover up to 95% of the home's value with a mortgage.

What are the risks of no down payment mortgages?

Borrowing a down payment increases your debt load, requiring you to repay both the mortgage and the loan. This can lead to higher monthly payments and tougher qualification criteria.

What are the minimum credit requirements?

Most lenders require a minimum credit score of 650 to qualify for a mortgage and a separate loan for the down payment.

Are there any government programs for down payments?

Yes, programs like the Nova Scotia Down Payment Assistance Program offer loans to eligible first-time buyers, helping them cover the required down payment.

What types of lenders offer no down payment options?

Alternative and private lenders are more likely to offer no down payment options, while major banks typically do not provide true zero down payment mortgages.

What is the typical mortgage rate for alternative lenders?

Mortgage rates from alternative lenders typically range from 6% to 8% or higher, depending on the lender and borrower profile.

How can I compare mortgage rates?

It's important to compare offers from multiple lenders to find the best rates and terms for your mortgage and any borrowed down payment.

mortgage lenders no down payment in Canada

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Information as of Aug 3, 2025

Overview

No down payment mortgages are a frequently asked-about option for Canadian homebuyers, especially first-time buyers struggling to save for a down payment. While true zero down payment mortgages—where no funds are put down by the buyer—are not permitted by Canadian banks due to federal regulations, there are alternative pathways that allow you to purchase a home without having personal savings for the minimum down payment. These involve borrowing the down payment from a separate source.

How "No Down Payment" Mortgages Work in Canada

Canadian law prohibits federally regulated lenders (such as major banks) from offering true zero down payment mortgages. As of 2008, you must still provide the required minimum down payment (5% for homes up to $500,000, 10% for the portion above, and 20% to avoid mortgage insurance).
You can buy with "no down payment" if you borrow the down payment from another lender (e.g., a line of credit, personal loan, or private lender).
This means you'll have both a mortgage and a separate loan to repay, increasing your total monthly obligations.

Typical Structure

Mortgage covers up to 95% of the home’s value (if insured).
The remaining 5% down payment is borrowed from an alternative lender (not from the mortgage provider itself).
You must qualify for both the mortgage and the loan providing the down payment, showing sufficient income and strong credit (usually 650+).

Lender Options & Programs

Lender/Program	Province/Region	Details	Down Payment Source
Alternative & Private Lenders	Nationwide	Will consider borrowed down payments; more flexible, but higher rates/fees	Line of credit, loan
Sagen Borrowed Down Payment	Nationwide	Insures high-ratio mortgages for borrowers using borrowed down payments (max 95% LTV)	Separate loan or LOC
Nova Scotia Down Payment Assistance Program	Nova Scotia	Government loan up to 5% of purchase price for first-time buyers meeting income/price limits	Government loan
Spire Mortgage (Alberta)	Alberta	Guides clients through the process of using a borrowed down payment	Loan, LOC, RRSP, gift

Note: Most big banks (BMO, RBC, TD, etc.) do not offer zero down payment mortgages, but some offer low down payment options (5%+). Only alternative or private lenders, or certain government programs, facilitate "no savings" down payment solutions.

Provincial Variations

Nova Scotia: The Down Payment Assistance Program directly loans eligible first-time buyers the required down payment, with specific price and income caps.
Alberta: Firms like Spire Mortgage help clients access borrowed down payment options (primarily through private or alternative lenders).
Other Provinces: No province-wide government zero down payment programs, but borrowed down payment options are available through private/alternative lenders and insured by Sagen.

Risks and Considerations

Higher Debt Load: You’ll owe both a mortgage and a separate loan for the down payment.
Tougher Qualification: Lenders will assess your ability to repay both debts, requiring strong credit and income.
Mortgage Insurance: If your down payment is under 20%, you must pay mortgage insurance premiums, which increase your monthly payment.
Potential for Higher Interest Rates: Alternative and private lenders typically charge higher rates than major banks.

First-Time Homebuyer Programs

First-Time Home Buyer Incentive (Canada-wide): Shared equity program that helps lower monthly mortgage payments, but still requires your own down payment.
RRSP Home Buyers’ Plan: Withdraw up to $35,000 from your RRSP for a down payment (must be repaid over 15 years).
Provincial Assistance: Some provinces, like Nova Scotia, offer loans for down payments.

Rate Comparison Table

Lender Type	Typical Down Payment Required	"No Down Payment" Option	Typical Mortgage Rate
Major Banks	5%+ (from own funds)	No	4.5%–5.5% (as of mid-2025)*
Alternative Lenders	5% (can be borrowed)	Yes	6%–8%+ (varies by lender)*
Private Lenders	5% (can be borrowed)	Yes	8%–12%+ (short-term only)*

*Rates are approximate and vary by lender and borrower profile.

Recommendations & Next Steps

Carefully evaluate your budget: Ensure you can afford both a mortgage and the loan for your down payment.
Check your credit score: Most lenders require a minimum score of 650 for these programs.
Explore government and provincial assistance: These can provide more affordable options for eligible buyers.
Compare rates and lender options: Always compare offers from multiple lenders before committing.

For a personalized rate comparison and access to both traditional and alternative lenders offering "no down payment" solutions, start your application at theratefinder.ca/onboarding. Theratefinder provides a comprehensive multi-step process, matching you with competitive rates from top Canadian lenders for residential, commercial, and construction mortgages.

Summary

True zero down payment mortgages are not available from Canadian banks, but you can borrow your down payment from another source, provided you qualify for both debts. This approach comes with higher risk and cost, but can help qualified buyers get into the market sooner. Provincial programs like Nova Scotia’s can further assist first-time buyers. Compare multiple lenders and consider all costs before proceeding. Start your application with theratefinder for expert guidance and the best available rates.