How to Build Your Down Payment in Alberta: Smart Borrowing and Investment Strategies
Renee Huse, founder of Spire Mortgage Team in Alberta, has helped hundreds of Alberta families figure out how to stop renting and start building equity—even when the down payment feels out of reach.
We know how hard it is to get ahead when home prices and costs keep climbing. But there is a smart way to borrow, invest, and build your down payment—without derailing your future. Let’s walk through it step by step.
What We’ll Cover:
- What Counts as a Down Payment in Canada?
- Should I Wait to Save More or Buy Sooner?
- How Lenders View Your Down Payment Source
- What If You Have Some Credit Challenges?
- Real Alberta Case Study
- Glossary: Key Terms
- FAQs
- Call‑to‑Action
What Counts as a Down Payment in Canada?
Your down payment is the upfront money you bring to the table when buying a home. The minimum varies by purchase price:
| Home Price | Minimum Down Payment |
|---|---|
| Up to $500,000 | 5% of the purchase price |
| $500,001 to $1,4999,999 | 5% of the first $500,000 + 10% on the portion above $500,000 |
| $1,500,000 or more | 20% of the purchase price |
Should I Wait to Save More or Buy Sooner?
If you’re renting at $2,200/month and saving another $40,000 for a 20% down payment, it could take 3–4 years—while paying over $100,000 in rent. Meanwhile, home prices may rise by 5–10%.
By buying now with 5–10% down—even with CMHC premiums—many clients build equity faster and sleep easier knowing they’re already home.
How Lenders View Your Down Payment Source
Here’s how lenders typically view different down payment sources:
| Source | Lender View |
|---|---|
| Your own savings | Strongest |
| RRSP via HBP | Very strong if there's a clear repayment plan |
| Gifted funds | Acceptable with proper documentation |
| Borrowed funds | Conditional—only if debt ratios remain healthy |
| Sale of asset | Acceptable with a clean paper trail |
Timing deposits and show proper documentation can help underwriting stay smooth.
What If You Have Some Credit Challenges?
Credit scores under 660 don’t close the door—but they do mean lenders need a confident story. If you’ve saved 5–10%, have steady income, but no RRSP or gift—here’s our prep plan over 12 months:
- Pay off small debts and lower credit card balances
- Add two small tradelines or credit accounts
- Save consistently into a TFSA or RRSP
- Show responsible financial behavior over time
This gives lenders comfort—and gives you flexibility.
Real Alberta Case Study: Saving with RRSPs + a Side Hustle
When we first met Emily, she was a 29-year-old healthcare worker living in Calgary. She loved her job, had stable income, and was ready to stop renting—but like many first-time buyers, she wasn’t sure if she had “enough” saved to get started.
Her goal was a $485,000 townhome in southeast Calgary. She had about $7,000 in savings, and had slowly built up $18,000 in her RRSP over a few years of steady contributions. What she also had—though she didn’t think it counted—was a part-time tutoring side hustle that brought in around $800 a month.
We sat down with her and helped her build a clear, lender-ready plan.
First, we restructured some of her savings. She moved a portion of her TFSA into her RRSP, bringing her total RRSP balance up to $25,000. That allowed her to access the full amount under the Home Buyers’ Plan, tax-free.
Between the RRSP withdrawal and her $7,000 in cash, she had a total down payment of $32,000—just over 6% of the purchase price.
We then used her tutoring income to help support her debt servicing ratios. Because the income was consistent and provable, lenders were comfortable including it in the file.
Emily ended up with a mortgage of about $453,000, locked into a 5-year fixed insured rate at 3.99%. Her monthly payment, including property tax, came in around $2,400—which was only slightly more than she had been paying in rent.
The best part? She kept the tutoring gig and used it to start repaying her RRSP right away.
Emily went from “I don’t think I have enough saved” to a confident homeowner with a realistic, personalized plan—and we were right there with her through every step.
Glossary: Key Terms
- Down Payment: The money you contribute upfront toward your home purchase.
- Home Buyers’ Plan (HBP): Lets eligible buyers withdraw up to $35,000 from RRSPs tax-free for a home purchase.
- Debt Servicing: A lender measure of your monthly debt obligations—including mortgage, loans, and credit payments.
- Gift Letter: Confirms gifted funds are non‑repayable and come from an immediate family member.
- TFSA: Tax-Free Savings Account—growth and withdrawals are tax‑free, with no income effect.
- Qualifying Rate: The rate lenders use to test affordability—it’s higher than your actual rate.
- Pre‑Approval: A lender’s estimate of how much you qualify for before house‑hunting.
- Conventional Mortgage: Requires at least 20% down and carries no insurance premium.
FAQs
Can I borrow money for my down payment?
Yes — but it must be fully disclosed and fit comfortably within your debt-service ratios. We’ll help you run the math before applying.
Is RRSP or TFSA better for a down payment?
It depends. RRSPs offer tax refunds and access to the Home Buyers’ Plan, but TFSAs give you more withdrawal flexibility. We’ll help you choose based on your income and timeline.
How long does it take to save up a down payment?
Most of our Alberta clients reach their savings goal in 12–24 months with a clear strategy. Consistency beats speed here.
Can I buy with just 5% down?
Yes — if the property is under $500,000 and you qualify based on income, debt, and credit. It’s more common than you think.
Can I use investments or crypto toward my down payment?
Yes — as long as the funds are liquidated and show a clear paper trail. We’ll help you structure the deposit properly for the lender.
