Costs and closing
Down payment
The cash you put into the purchase: 5% up to $500,000, 10% on the portion to $1.5M, and 20% above that.
Canada sets the minimum down payment in price bands. You need 5% of the first $500,000 of the price and 10% of the portion between $500,000 and $1,500,000. A purchase at or above $1,500,000 needs 20%, because default insurance isn't available at that price.
Edmonton's average price is about $470,000, so the whole purchase sits in the first band and the minimum is roughly $23,500.
Your down payment must be traceable for 90 days before closing. Gifts from immediate family are allowed with a signed gift letter and proof the money arrived. Some lenders accept a borrowed down payment at a cost, and the repayments count in your debt-service ratios.
Insurance premiums step at fixed thresholds, so a 10.00% down payment costs noticeably less in insurance than a 9.99% one. If you're just under a threshold, a few hundred dollars more down is often the best-value money you'll spend on the whole purchase.
Related terms
Mortgage default insurance
Insurance that protects the lender if you default, required with less than 20% down and paid for by you.
Gift letter
A signed statement from an immediate family member confirming that down payment money is a gift with no repayment expected.
Loan-to-value (LTV)
The mortgage as a percentage of the property's value, which decides your insurance, your pricing tier and how much you can borrow.
This definition describes how the term is used in Canadian residential mortgage lending. It’s general information, not advice on your file. Rules, thresholds and rates change. Where a figure is quoted, it’s current as of the date shown on the related guide.
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