There are many ways to put together a down payment. We classify them two ways: traditional or non-traditional. Here are a few options of each.
Traditional Down Payment
- Use savings currently in the bank (includes inheritance)
- Cash in RRSP’s
- Non-RRSP investments: stocks, bonds, TFSA
- Withdraw RRSP with Home Buyers’ Plan (HBP) up to $ 35 000 per borrower, with a reimbursement plan applicable to withdrawals made after March 19, 2019.
Divorced or separated persons will also be allowed to participate in the HBP, even if they do not meet the requirement to be first-time home buyers. This measure will apply to withdrawals made after 2019.
- Non-repayable gift from immediate relative (parents, grandparents, siblings)
- Proceeds from the sale of a property (equity gained)
- Loan secured against proven assets such as, title free land or collateral (equity of a first home as security on the purchase of a second)
- Down payment grant (non-refundable amount paid by a federal, provincial or municipal government)
- Refinancing of another property
- Self-build construction (labour done by the borrower may make up to 50% of the down payment)
Non-traditional Down Payment
- Repayable loan from parents, grandparents, siblings
- Personal loan