Down Payments and Closing Costs Answered
The down payment gets all the attention - and then closing week arrives with a second bill nobody budgeted. Here is the real cash-to-close picture for Alberta buyers, answered straight by a broker who has walked people to the lawyer's office since 1999.
Updated August 2026 · 21 questions answeredWhat is the minimum down payment in Canada?
5% on the first $500,000 of the price, 10% on the portion from $500,000 to $1.5 million, and 20% for homes at $1.5 million or above. Federal law - no lender can go lower.
Worked examples: a $400,000 home needs $20,000. A $700,000 home needs $45,000 (5% of the first $500,000 is $25,000, plus 10% of the remaining $200,000 is $20,000). A $1,600,000 home needs $320,000 - the full 20%. Anything under 20% down means the mortgage carries default insurance, which adds a premium to the balance but frequently buys you a BETTER rate. Minimums are the floor, not the strategy - the right amount for your file is a separate question worth asking properly.
Text Shawn a price and get the exact minimum back in minutes: 403-703-6847.
How much down payment do I need to avoid CMHC insurance?
20% of the purchase price - $100,000 on a $500,000 home. But before you drain every account to get there, hear the plot twist: avoiding the insurance is not automatically the win it sounds like.
Insured mortgages are the safest paper a lender can hold, so they routinely carry LOWER rates than uninsured ones. That means 19.99% down with the premium can, in some scenarios, cost less over a five-year term than 20% down without it - while leaving cash in your pocket for the closing costs and the emergency fund. Not always; it depends on the rate spread and premium tier at the time. The only honest answer is a side-by-side on your actual numbers, which takes minutes.
Shawn models both scenarios before you commit a dollar: 403-703-6847.
Can my down payment be a gift from family?
Yes - gifts from immediate family (parents, grandparents, siblings) are accepted virtually everywhere and can cover 100% of the down payment. Some lenders stretch to aunts, uncles and close others; the further the relationship, the fewer the takers.
The paperwork is simple and strict: a signed gift letter stating the amount, the relationship, and that no repayment is expected - plus a bank statement from the giver proving the funds exist. Some lenders want the money sitting in your account 15 to 30 days before closing, so move it early. One thing a gift letter cannot be: a disguised loan. Lenders take the "no repayment" declaration seriously, and so should everyone signing it.
Shawn has gift letter templates ready - one text away: 403-703-6847.
Can I borrow my down payment?
Sometimes - but the borrowed payment counts against your debt ratios, so every borrowed down payment dollar shrinks the mortgage you qualify for. It is a trade, not a trick.
The rules of the road: on insured purchases, a core portion must come from your own resources - savings, RRSP, FHSA, or a genuine gift - with borrowing possible above that at some lenders. On uninsured files there is more room. Either way, the line of credit payment lands in your TDS and takes qualification room with it. Before borrowing, exhaust the better shelves: the FHSA and Home Buyers' Plan give you down payment money with no monthly payment attached, and a family gift carries no ratio cost at all.
Thinking of borrowing the down payment? Have Shawn price what it does to your approval first: 403-703-6847.
What are typical closing costs when buying a home in Alberta?
Budget 1.5% to 3% of the purchase price on top of the down payment - roughly $7,500 to $15,000 on a $500,000 home. This is the bill that surprises people, so put it in the plan on day one.
The line items: legal fees and disbursements ($1,200 to $2,000), land title and mortgage registration (roughly $1,000 on a typical purchase since Alberta raised the fees in October 2024), title insurance ($250 to $400), home inspection ($400 to $600), the property tax adjustment (varies - see below), then movers, utility hookups and the first-week hardware run. The default insurance premium, if you have one, rides on the mortgage rather than hitting your chequing account at closing.
Alberta note: even with the 2024 fee increase, we still have NO land transfer tax - the giant closing cost that hits buyers in Ontario and BC does not exist here. Your closing bill in Alberta remains thousands lighter than the same purchase elsewhere.
Shawn builds a closing-cost breakdown for any property before you offer: 403-703-6847.
Is there a land transfer tax in Alberta?
No. Alberta has no land transfer tax - one of the largest quiet advantages of buying here, worth thousands on every purchase.
For scale: on a $500,000 home, land transfer tax runs about $6,475 in Ontario (double it inside Toronto) and about $8,000 in BC. In Alberta: zero tax. What we do have is the land titles registration levy - a government fee that increased in October 2024 - but even after the increase it is around a thousand dollars on a typical purchase, not many thousands. Buyers relocating from other provinces should redirect the tax they are NOT paying straight into their down payment or cushion fund.
Relocating to Alberta? Shawn will show you what your money does here: 403-703-6847.
How much are Alberta land title and registration fees?
Since October 20, 2024: a base fee plus $5 per $5,000 of value - for BOTH the land transfer registration and the mortgage registration. On a $500,000 home with a $400,000 mortgage, budget roughly $1,000 all-in.
The arithmetic: registering the transfer on a $500,000 home runs about $550 ($50 base plus $5 for each $5,000 of value), and registering a $400,000 mortgage about $450. Your lawyer handles both at closing and itemizes them in the disbursement summary. Worth knowing: these fees more than doubled in the October 2024 change (the old rates were $2 and $1.50 per $5,000), so older articles and calculators lowball the number. Even at the new rates, it is a fraction of the land transfer TAX other provinces charge.
Want the exact figure for your price point? Text Shawn the numbers: 403-703-6847.
Do I need a lawyer to buy a home in Alberta?
Yes - Alberta closings require a lawyer (not a notary, as in BC). Budget $1,200 to $2,000 for fees and disbursements, and think of it as the cheapest insurance in the entire transaction.
Your lawyer reviews the purchase contract, searches title for liens and surprises, registers the transfer and mortgage, moves the money through trust, checks the Real Property Report and compliance, and coordinates with the seller's lawyer and your lender. A good real estate lawyer catches problems while they are still cheap to fix. Brokers work with these offices every week - if you do not have one, a recommendation is one question away.
Need a lawyer who closes clean and on time? Ask Shawn who he trusts: 403-703-6847.
Who pays for the appraisal when buying a home?
Officially the buyer - typically $300 to $500. In practice, many lenders cover it on purchases, and many standard urban files skip the physical appraisal entirely in favour of automated valuations.
Expect a real appraisal - and a real invoice unless the lender absorbs it - on rural properties, acreages, higher-value homes, tight loan-to-value files and refinances. Which lenders cover appraisal costs is one of those unglamorous details that quietly saves a few hundred dollars, and it is exactly the kind of thing a broker prices into the lender choice.
Shawn knows who covers the appraisal and who does not: 403-703-6847.
Who pays for the home inspection?
You do, always - $400 to $600 standard - and it is the best money in the entire budget. No lender requires it; every experienced buyer gets one anyway.
The standard inspection covers structure, roof, foundation, electrical, plumbing, HVAC, insulation, grading and visible defects. Rural buyers should add the specialty tests: well water ($100 to $200), sewer scope ($200 to $350), radon ($150 to $250). Waiving the inspection to sweeten an offer trades a $500 expense for an uncapped risk - a strategy that works right up until it very much does not.
Alberta note: freeze-thaw cycles, hail, and our expansive clay soils give Southern Alberta homes their own failure modes - foundation movement is a local specialty. And always review the Real Property Report before you firm up. It is an Alberta institution for a reason.
Questions about inspections or the RPR? Call Shawn: 403-703-6847.
Can closing costs be added to the mortgage?
On a standard purchase, no - closing costs are paid in cash at closing. The one exception baked into the system: the default insurance premium, which rides on the mortgage balance.
If the closing bill is the bottleneck, there are workarounds, each with a price: cash-back mortgage products (upfront money for a higher rate - read the fine print twice), a family gift earmarked for closing costs, a personal line of credit (counts against ratios), or seller concessions negotiated into the deal. The better plan is upstream: know the full cash-to-close number before you shop, so closing week is paperwork instead of panic.
Closing costs looking tight? Talk to Shawn BEFORE you offer, while there are still options: 403-703-6847.
How does my down payment size affect my mortgage approval?
More down means a smaller mortgage and easier ratios - but the relationship is not a straight line, and the sweet spots are not where most people think.
The counterintuitive map: just under 20% down with insurance often prices BETTER than exactly 20% without. Meaningfully larger down payments unlock the strongest uninsured products. And at very high equity levels, some lenders offer equity-based programs where the property strength carries more of the file - relevant for retirees and the self-employed. The point is that "how much should I put down" is a strategy question with a calculable answer, not a virtue contest where more always wins.
Shawn runs your file at multiple down payment levels and shows you the map: 403-703-6847.
How much money should I have saved besides the down payment?
At minimum, 1.5% of the price for closing costs. The real target: closing costs PLUS two to three months of mortgage payments as a cushion. On a $500,000 home, think $7,500 for closing and another $6,000 to $9,000 behind it.
This is not just prudence - lenders look for it. A file that closes with zero dollars left reads as fragile, and some lenders explicitly require reserves. The cushion is also just real life: the furnace, the hot water tank and the first surprise repair do not wait politely for year two. Buying with nothing left is how a house becomes a stress machine; buying with a cushion is how it becomes a home.
Text Shawn your savings picture and he will tell you if the whole plan holds: 403-703-6847.
What first-time buyer programs are available in Canada right now?
The strongest stack Canada has ever offered: the FHSA (up to $40,000, never repaid), the RRSP Home Buyers' Plan (up to $60,000, repaid over 15 years), the GST rebate on new builds up to $50,000, the Home Buyers' Tax Credit (about $1,500 back), and 30-year amortizations for qualifying first-timers.
Every one of these stacks with the others on a single purchase - a couple using the full kit on a new build can put six figures of government-advantaged money to work. The tragedy is how few buyers claim the whole stack; most use one program and never hear about the rest. That is a solvable problem: it is literally a broker's job to make sure nothing gets left on the table.
The full breakdown lives in the first-time buyer FAQ and the complete first-time buyer guide - or let Shawn map your stack: 403-703-6847.
What is the property tax adjustment at closing?
A fairness settlement, not a new tax: if the seller prepaid property taxes past the closing date, you reimburse their share - and if they have not paid yet, you get the credit instead.
Example: the seller paid the full $4,000 annual tax bill and you close July 1 - you owe them roughly $2,000 for the half-year you will occupy. Your lawyer calculates it to the day and settles it in the closing statement. Budgeting rule of thumb: set aside about a quarter of the annual tax bill for the adjustment and you will rarely be surprised.
Alberta note: mill rates differ meaningfully between Calgary, Okotoks, High River and rural Foothills County - the same house price carries a different tax bill in each. Worth checking before you fall for a listing, not after.
Shawn factors the right municipality's taxes into every qualification: 403-703-6847.
How much down payment do I need for a high-value home in Alberta?
Above $1.5 million the federal minimum is 20% - but on high-value properties, most lenders apply their own tiered financing formulas on top, and those formulas differ so much that the SAME house can need six figures more down at one lender than another.
This is sliding scale territory: lenders finance the full percentage only up to their own internal lines, and where those lines sit - and how the formula steps down past them - varies by lender, by location, and by property type, and moves without notice. Your bank can only ever quote you its own math. On a high-value purchase, matching the property to the lender whose formula treats it best is worth more than any rate negotiation on the file - often dramatically more.
The full guide with worked examples: mortgages over $1 million in Alberta - or call Shawn with the address and get your real number: 403-703-6847.
Is my offer deposit part of the down payment?
Yes - the deposit you write with your offer is not an extra cost, it is the first installment of your down payment, credited back to you at closing. But it is also real money at real risk if you walk away without conditions protecting you.
The mechanics: the deposit (commonly a few thousand to tens of thousands, sized to the market and the offer) sits in the Realtor's or lawyer's trust account and counts toward your down payment on the closing statement. The danger zone: back out of a firm deal without a condition to stand on and the deposit is typically forfeit - and that is the FLOOR of the exposure, not the ceiling. This is exactly why financing and inspection conditions exist, and why waiving them to look competitive deserves sober second thought.
Writing an offer and unsure how big the deposit should be? That is a two-minute call: 403-703-6847.
Do I need a bigger down payment for an acreage or rural property?
Very possibly - rural and acreage purchases play by different rules, because what a lender will finance depends on how they treat the land, the outbuildings and the property type. Two lenders can look at the same acreage and require very different down payments.
City rules stretch badly outside city limits. Lenders differ on how much acreage they will lend against, how they value shops and outbuildings, and what property types they will touch at all - and those differences flow straight into your required cash. The good news: with the right lender match, plenty of acreages close at ordinary down payments. The expensive mistake is assuming your bank's answer is THE answer and either overpaying in cash or walking away from a property that another lender would have financed happily.
The full guide: acreage and rural property mortgages in Alberta - or text Shawn the listing before you offer: 403-703-6847.
Do I need a bigger down payment if I am self-employed?
Not necessarily - self-employed buyers with two years of documented income qualify for the same 5% minimums as anyone else. Bigger down payments enter the picture when the income gets read through alternative programs.
The pattern: full-documentation self-employed files get standard treatment. Stated-income and alternative programs - the routes for strong businesses with aggressively tax-planned personal incomes - typically want more skin in the game, often in the 10 to 20% range depending on the program and lender. Which route fits is not about how good your business is; it is about how your paperwork reads. That is decided one or two tax years BEFORE the purchase, which is why the smartest self-employed buyers loop in the broker and accountant early.
The full playbook: self-employed mortgages in Alberta - or bring Shawn your returns and get the real answer: 403-703-6847.
Can I use the money from selling my current home - and what if the dates do not line up?
Sale proceeds are the classic down payment for move-up buyers, fully accepted everywhere. And when the new home closes BEFORE the old one pays out, bridge financing exists precisely to span the gap.
The clean version: your sale closes first, the equity lands in trust, and it funds the purchase days later - your lawyer choreographs it. The common version: possession dates cross, and a bridge loan advances your locked-in equity (a firm, unconditional sale is the ticket) for the days or weeks between closings, interest-only, at short-money pricing. What matters is arranging the bridge BEFORE you sign the possession dates, not scrambling after. Dates are negotiable at offer time; they are expensive to fix later.
Buying and selling in the same season? Get the sequence right first - more in the mortgage types FAQ, or one call: 403-703-6847.
What are the down payment rules if I am new to Canada?
Newcomer programs exist at most major lenders, and with permanent resident status and Canadian employment, down payments start at the same 5% as everyone else. Thin Canadian credit history is a solved problem, not a wall.
Where the rules bend: non-permanent residents (work permits) typically need somewhat more down, and every program wants the down payment documented to Canadian standards - which matters when funds arrive from overseas. Money transferred from abroad needs a clear paper trail and time to season in a Canadian account, so start the transfer early, keep the records, and do not move it in fragments that look confusing on statements. Alternative credit proof (rent, utilities, phone - twelve months of it) stands in for the credit history you have not had time to build.
The full guide: newcomer mortgages in Alberta - or call Shawn and bring your questions in any language of paperwork: 403-703-6847.
The Down Payment Is Not the Finish Line
Here's the thing about saving for a house: everyone fixates on the down payment number, sprints at it, touches it - and then discovers the race had a second lap. Closing costs, the tax adjustment, the movers, the cushion the lender wants to see. The buyers who sail through closing week are not the ones who saved the most; they are the ones who knew the WHOLE number before they started shopping.
The real cash-to-close number
Down payment, plus 1.5 to 3% for closing costs, plus two or three mortgage payments as a cushion. That is the honest formula. On a $500,000 purchase with 5% down, the difference between "I have $25,000" and "I have $40,000" is the difference between a white-knuckle closing and a calm one. Nobody enjoys hearing the bigger number - but hearing it a year early beats discovering it a week before possession, every single time.
The Alberta head start
Buyers here start ahead and should know it. No land transfer tax - the four-, five-figure closing hit in Ontario and BC simply does not exist in Alberta. Yes, the province more than doubled the land titles levy in October 2024, and older articles still quote the old rates - but even the new fees are around a thousand dollars where other provinces take many times that. If you are relocating from a land-transfer-tax province, redirect what you are not paying into the cushion. You just found it for free.
Where the money can come from
Savings, the FHSA, the Home Buyers' Plan, a family gift, sale proceeds from your current home - all first-class sources, all stackable. The rule that ties them together: every dollar needs a paper trail, and most need time to season in your account. Lenders trace large deposits back 90 days. The down payment that causes problems is never the small one - it is the undocumented one. Tell your broker the money's story up front and there are no surprises later.
Where lender choice moves six figures
Two corners of this topic punish the wrong lender choice brutally: high-value homes, where each lender's internal financing formula sets a different down payment for the identical property - and acreages, where how the lender treats land and outbuildings decides your cash requirement. In both corners, the spread between lenders is not basis points; it can be six figures of down payment. One bank can only quote its own rules. Comparing 20+ of them is the whole job.
Know Your Real Numbers Before You Start Shopping
Down payment, closing costs, cushion - the complete cash-to-close picture, on your actual situation, before you fall in love with anything. No surprises. 25+ years of closings behind it.
Call or Text 403-703-6847 Start OnlineAnswers are general information for Alberta buyers, not advice for your specific situation - fees, program rules and lender policies change (Alberta's land titles fees last changed October 2024; figures verified August 2026). Shawn Selanders is a RECA-licensed mortgage broker with Mortgage Architects, serving Calgary, Okotoks, High River and Southern Alberta since 1999.