How Much Down Payment Do First-Time Buyers Need in Vancouver?

If you’re a first-time home buyer in Vancouver, the down payment question is usually the biggest source of confusion — and misinformation.

You may hear that you must have 20% down, or that buying under a certain price magically changes the rules. The truth is simpler and more flexible than most people expect.

Here’s the current, accurate breakdown of how down payments actually work for first-time buyers in Vancouver.

The Minimum Down Payment Rules (Canada-Wide)

Down payment rules in Vancouver follow federal Canadian guidelines, not special city-specific rules. The minimum required depends entirely on the purchase price of the home.

✔ Homes priced $500,000 or less

• Minimum down payment: 5% of the purchase price

Example:
$450,000 purchase → $22,500 down

✔ Homes priced over $500,000 up to $1,499,999

The down payment is calculated in two parts:

• 5% of the first $500,000

• 10% of the portion above $500,000

Example:
$800,000 purchase

• 5% of $500,000 = $25,000

• 10% of $300,000 = $30,000
  👉 Total down payment: $55,000

This rule applies all the way up to $1.5 million, which is a relatively recent change and very relevant in Vancouver.

✔ Homes priced $1,500,000 or more

• Minimum down payment: 20% of the full purchase price

At this price point, mortgage default insurance is not available, so a full 20% down payment is required.

Do First-Time Buyers Need 20% Down in Vancouver?

Not automatically.

Many first-time buyers in Vancouver assume 20% is required simply because of local prices. In reality, 20% is only required once the purchase price reaches $1.5 million or higher — or if you choose to avoid mortgage insurance.

If your down payment is less than 20%, mortgage default insurance (such as CMHC insurance) is required. This allows buyers to purchase with a smaller down payment while still accessing competitive mortgage options.

Property Transfer Tax

You may hear that first-time buyers can “buy up to $835,000.” This is not a mortgage or down payment limit.

That figure relates to BC’s First-Time Home Buyer Property Transfer Tax exemption:

• Homes priced up to $835,000 may qualify for a full exemption

• Homes slightly above that may qualify for a partial exemption

This affects closing costs, not mortgage qualification or minimum down payment rules.

Can Gifted Funds Be Used for a Down Payment?

Yes. Gifted down payments from immediate family members are common and widely accepted.

Lenders typically require:

• A signed gift letter

• Confirmation that the funds do not need to be repaid

Gifted funds can be used for part or all of the down payment when documented properly.

Should You Put Down the Minimum?

The minimum down payment is exactly that — a minimum.

Putting more down can:

• Reduce monthly payments

• Lower interest costs over time

• Eliminate mortgage insurance at 20%

However, using every dollar of savings for a down payment isn’t always the best move, especially in a high-cost city like Vancouver where maintaining emergency funds and flexibility matters.

The “right” down payment is about balance, not just rules.

Final Thoughts

First-time buyers in Vancouver don’t need perfect finances or massive savings to get started — but they do need accurate information.

Understanding how down payments actually work removes unnecessary fear and helps you plan realistically. From there, the focus shifts to affordability, comfort, and long-term goals — not just minimum requirements.

If you’re early in the process and want clarity before making decisions, getting advice upfront can save time, stress, and expensive surprises later.

Written by Alison Rudover
Independent mortgage broker helping first-time buyers across British Columbia.