Should I Buy With No Down Payment in Alberta? Full Cost Breakdown & Strategy
Renee Huse, founder of Spire Mortgage Team in Alberta, has helped hundreds of Albertans crack the code on down payments — especially when savings are tight but opportunity is calling.
Let’s be real: saving 5% to 20% down on a $450,000 home takes serious time — and for many buyers, that time feels like it costs more than money. Rent climbs. Prices creep. Your financial momentum stalls.
So here’s the question more and more of our clients are asking:
Should I buy now using a borrowed down payment — or keep saving and risk getting priced out?
This blog answers that question with side-by-side math, real Alberta case studies, and a sharp look at whether zero down is a smart move for you.
🔍 In This Guide:
- What Borrowed Down Means (and Doesn’t)
- CMHC & Alberta Lender Rules
- Real Cost Comparison: 0%, 5%, and 20% Down
- Lisa’s Strategy: Buying With Borrowed 5% in Airdrie
- “Should I Wait or Borrow?” Scorecard
- Smart Borrowed Down Moves
- Glossary
- FAQs
- Next Step
What Borrowed Down Means (and Doesn’t)
Buying a home with no down payment doesn’t mean no money — it means borrowing your down payment instead of saving it.
This usually looks like:
- An unsecured line of credit (LOC)
- A personal loan
- Secured borrowing (against a vehicle, RRSP, or employer loan)
Your monthly payments on that loan must fit your mortgage application’s qualifying ratios. This is all above-board — disclosed, documented, and underwritten — and possible if your credit and income support it.
CMHC & Alberta Lender Rules
In Alberta, most lenders follow CMHC guidelines for borrowers with less than 20% down. CMHC does allow borrowed down payments — if:
- You’re buying a primary residence
- You qualify with the borrowed loan payment included
- Funds are not from a credit card
- There are no undisclosed gifts or loans
You still need to meet credit score and debt service minimums.
| Scenario | Down Payment | Mortgage Amount | Rate | Monthly Mortgage | Loan Payment | Total Monthly Cost |
|---|---|---|---|---|---|---|
| Borrowed 5% | $22,500 (via LOC @ 9%) | $472,000 (inc. insurance) | 3.99% | $2,234 | $360 | $2,594 |
| Saved 5% | $22,500 (cash) | $472,000 | 3.99% | $2,234 | $0 | $2,234 |
| 20% Down | $90,000 | $360,000 | 4.34% | $1,790 | $0 | $1,790 |
Borrowed down costs more up front — but it can save you years of rent and thousands in missed appreciation if the market rises.
Lisa’s Strategy: Buying With Borrowed 5% in Airdrie
Background: Lisa, 32, rented a duplex in Airdrie for $2,100/month. She had $5K saved, no car loan, a 685 credit score, and strong income — but didn’t want to wait 5+ years to buy.
What We Did:
- Home Price: $430,000
- Borrowed Down: $21,500 via LOC @ 9%
- Mortgage Amount: ~$452,000 (incl. CMHC premium)
- Rate: 3.99% fixed
- Amortization: 30 years
- Mortgage Payment: $2,119
- LOC Payment: $344/month (interest-only)
- Total Monthly Cost: $2,463
Strategy: Lisa tackled the high-interest LOC first using bonuses and commissions. Once it’s gone (target: 3 years), she’ll redirect those funds to her mortgage using her 20% prepayment privileges.
“Rent was money out the window. With this plan, I’m investing in my future — and still in control of the debt.”
“Should I Wait or Borrow?” Scorecard
| Situation | Best Fit |
|---|---|
| Credit Score 660+ | Borrow or Save |
| Rent Over $2,000/month | Borrow |
| Saving Timeline > 2 Years | Borrow |
| Low Existing Debt | Borrow |
| High Variable Income | Save |
| Uncomfortable With Risk | Save |
Smart Borrowed Down Moves
- Negotiate LOC terms: Ask for better rates or promo periods
- Pay down high interest debt first: LOC takes priority
- Use prepayments strategically: After LOC, prepay the mortgage
- Refinance when ready: Roll the LOC into your mortgage with a refinance if you hit more than 20% equity
Glossary
- Insured Mortgage – Under 20% down, backed by CMHC or similar
- Conventional Mortgage – 20%+ down, no insurance required
- Amortization – Total time to repay a mortgage
- Line of Credit (LOC) – Flexible borrowing tool with interest-only payments
- Debt Service Ratios – Guidelines for how much of your income can go to debt
- Prepayment Privilege – Right to pay extra toward mortgage annually
- CMHC Premium – Fee added to insured mortgages
- Equity – The portion of your home you own
FAQs
- Can I buy a home in Alberta with no savings at all?
Yes, if you can borrow the down payment and qualify under CMHC rules. - Does a borrowed down payment hurt my mortgage rate?
No, you’ll still access insured rates — currently around 3.99% fixed. - Can I pay off the borrowed portion early?
Yes — and that’s the plan. Most clients do this within 2–4 years. - Can this work for self-employed buyers?
It can, as long as income is provable and credit meets guidelines. - What if rates rise while I’m repaying the LOC?
Mortgage rate is fixed, but LOC rates can rise — so early repayment is ideal.
Next Step
Curious if borrowing your down payment is right for you? Let’s map it out together — no pressure, just strategy.
Give us a call or fill out an application here and our team will get in touch with you to start building a plan that suits you.
Written by Renee Huse, licensed mortgage broker and founder of Spire Mortgage. Renee helps Albertans make confident real estate decisions with smart financing strategies tailored to their goals. Learn more about Renee here.
