Can You Buy a Home in Bowmanville Without a 20% Down Payment?

Is It Possible to Buy a Home in Bowmanville Without a 20% Down Payment?

One of the biggest misconceptions among homebuyers—especially first-time buyers in Bowmanville, Clarington, and Durham Region—is that they must have a 20% down payment to buy a home. While putting 20% down has its advantages, many affordable financing options allow buyers to purchase a home with as little as 5% down.

At Boyle Team Real Estate, led by Marlene Boyle, we help buyers navigate mortgage options, understand down payment requirements, and find their dream home in Bowmanville and beyond. If you’re wondering whether you can buy a home without 20% down, this guide will break down your options, costs, and available programs to make homeownership more achievable.

1. Understanding Minimum Down Payment Rules in Ontario

In Canada, the required minimum down payment depends on the home’s purchase price.

Minimum Down Payment Requirements:

🏡 Homes under $500,000 – 5% minimum down payment
🏡 Homes between $500,000 and $999,999 – 5% on the first $500K, 10% on the remainder
🏡 Homes over $1 million – 20% minimum down payment

💡 Example: If you buy a $700,000 home in Bowmanville, your down payment would be:

• 5% on the first $500,000 → $25,000
• 10% on the remaining $200,000 → $20,000
• Total minimum down payment: $45,000

2. What Happens If You Put Less Than 20% Down?

If your down payment is less than 20%, you’ll need to purchase mortgage default insurance through Canada Mortgage and Housing Corporation (CMHC), Sagen, or Canada Guaranty.

What Is Mortgage Default Insurance?

This insurance protects lenders in case a borrower defaults on their mortgage. It allows buyers to qualify for mortgages with smaller down payments while keeping interest rates competitive.

CMHC Insurance Rates:

• 5% – 9.99% down payment → 4.00% of mortgage amount
• 10% – 14.99% down payment → 3.10% of mortgage amount
• 15% – 19.99% down payment → 2.80% of mortgage amount

💡 Example: If you buy a $700,000 home with a $45,000 down payment, your mortgage will be $655,000. Your CMHC insurance premium would be $20,305 (3.10% of $655,000), which is added to your mortgage balance.

3. Pros and Cons of Buying a Home With Less Than 20% Down

✅ Benefits of a Smaller Down Payment

✔ Enter the market sooner – No need to save for years to reach 20%.
✔ More cash available for renovations or emergency savings.
✔ Take advantage of home price appreciation sooner.

❌ Downsides of a Smaller Down Payment

❌ Higher mortgage payments due to a larger loan amount.
❌ CMHC insurance adds to your total borrowing cost.
❌ Less home equity upfront.

💡 Pro Tip: If you have strong job stability and manageable debt, a smaller down payment may be worth it to start building equity sooner rather than waiting years to save 20%.

4. First-Time Homebuyer Incentives That Help With Down Payments

If you’re struggling to save for a larger down payment, several government programs can help make homeownership more accessible.

Home Buyers’ Plan (HBP)

✔ Allows first-time buyers to withdraw up to $60,000 from their RRSPs tax-free.
✔ Must repay the funds within 15 years to avoid tax penalties.

First-Time Home Buyer Incentive (FTHBI)

✔ A government shared-equity loan that covers 5% (resale homes) or 10% (new homes) of your purchase price.
✔ Must be repaid within 25 years or when the home is sold.
✔ Helps lower monthly mortgage payments but requires giving up a portion of future home appreciation.

Ontario Land Transfer Tax Rebate

✔ First-time buyers get up to $4,000 off their land transfer tax.
✔ Applies to homes under $368,000 (partial rebate for higher-priced homes).

💡 Pro Tip: Combining these programs can significantly reduce your upfront costs! Speak to a mortgage broker to see which ones you qualify for.

5. How to Strengthen Your Mortgage Application With a Small Down Payment

If you’re putting less than 20% down, lenders will carefully assess your financial situation. Here’s how to boost your approval chances:

✔ Improve Your Credit Score – Aim for 680+ for the best mortgage rates.
✔ Reduce Debt-to-Income Ratio – Pay down credit cards, car loans, or student debt.
✔ Get Pre-Approved – Shows sellers you’re serious and helps you lock in a rate.
✔ Choose a Stable Job & Income – Lenders prefer borrowers with steady employment history.

💡 Pro Tip: Avoid making large purchases or taking on new debt before getting a mortgage—this can hurt your debt-to-income ratio and lower your loan approval amount.

6. Should You Wait Until You Have 20% Saved?

Some buyers wonder if it’s better to wait until they can afford a 20% down payment. Here are some factors to consider:

Buy Now With a Smaller Down Payment If:

✔ You want to take advantage of current home prices before they increase.
✔ Interest rates are low, making borrowing cheaper.
✔ You have stable income and can comfortably afford mortgage payments.

Wait Until You Have 20% Down If:

❌ You have a low credit score that could lead to higher interest rates.
❌ You want to avoid CMHC insurance costs.
❌ Your current financial situation is unstable, and saving longer is a safer option.

💡 Pro Tip: Renting while saving for 20% can work—but if home prices rise, you may end up paying more later.

7. Work With Boyle Team Real Estate to Find the Right Home & Mortgage Option

Navigating the homebuying process—especially when deciding on the right down payment—can be complex. Working with an experienced real estate agent and a trusted mortgage broker can help you find the best options for your situation.

How Boyle Team Real Estate Can Help:

✅ Connect you with mortgage experts to explore low down payment options.
✅ Find homes that fit your budget and financial goals.
✅ Negotiate the best possible price & terms to save you money.
✅ Guide you through the buying process from start to finish.

📞 Ready to buy a home in Bowmanville or Clarington? Contact Marlene Boyle and the Boyle Team today to start your home search!

Final Thoughts: Can You Buy a Home Without 20% Down?

✔ Yes! Many buyers successfully purchase homes with 5% – 10% down payments.
✔ CMHC mortgage insurance allows buyers to enter the market sooner with less than 20% down.
✔ Government programs like the Home Buyers’ Plan and First-Time Home Buyer Incentive can reduce costs.

📞 Thinking about buying a home but unsure about your down payment options? Contact Boyle Team Real Estate today for expert guidance!