How to Buy a Home with No Down Payment

For many aspiring homeowners in Toronto and across the Greater Toronto Area (GTA), the biggest hurdle to buying a home isn’t income—it’s the down payment. With housing prices still among the highest in Canada, saving up 5% to 20% of a home’s value can feel out of reach. But here’s the truth: buying a home with little to no down payment is possible, even in a competitive market like the GTA.

Let’s explore the legitimate options available to help you get into the market sooner than you may have thought—without draining your savings.

1. Borrow Your Down Payment

In Canada, you can legally borrow your down payment under certain conditions. This is often referred to as a flex down mortgage, and it allows qualified buyers to use a line of credit, personal loan, or even a credit card advance to cover the minimum 5% required for insured mortgages.

However, lenders will factor in your debt obligations when assessing your mortgage affordability. You'll need:

• A strong credit score
  
  

• A stable income
  
  

• Low overall debt levels
  
  

The key is showing the lender that you can manage both your mortgage payment and the repayments on the borrowed down payment.

2. Look Into Government Programs

The Canadian government offers programs specifically designed to help first-time buyers get into the market:

First-Time Home Buyer Incentive (FTHBI)

This program provides 5% or 10% of a home's purchase price as a shared equity loan, reducing your mortgage payments. While it doesn't eliminate the need for a down payment, it helps lower the upfront and monthly costs, making ownership more accessible.

RRSP Home Buyers’ Plan (HBP)

You can borrow up to $60,000 from your RRSP tax-free (or $120,000 as a couple) to use towards a down payment. While it’s technically a withdrawal, the government gives you 15 years to repay it without interest.

First Home Savings Account (FHSA)

New as of 2023, the FHSA lets you contribute up to $40,000 tax-free toward your first home. Unlike the HBP, withdrawals don’t need to be repaid, and any growth in the account is tax-sheltered.

3. Explore Zero Down Options with Private or Alternative Lenders

Some private lenders in the GTA offer zero down payment options, often requiring higher interest rates or additional fees. These can work for buyers with non-traditional income sources, lower credit scores, or those who don’t qualify under stricter bank guidelines.

While these products may come with trade-offs, they can offer a realistic path to homeownership—especially if you're expecting your income or credit to improve in the short term and plan to refinance later.

4. Gifted Down Payment

A common and acceptable strategy in Toronto is using a gifted down payment from a parent or relative. Most major banks allow this, provided the gift is not a loan and is accompanied by a signed gift letter. It’s becoming increasingly popular as families team up to help the next generation get a foothold in the market.

5. Buy with a Co-Borrower or Co-Signer

Buying with a trusted friend, sibling, or parent as a co-borrower can help you qualify for a mortgage without needing as large of a down payment. Similarly, a co-signer—often a parent—can add their income and credit strength to your application without being on title.

6. Consider Rent-to-Own Programs

Some developers and private companies offer rent-to-own programs where a portion of your monthly rent goes toward your future down payment. While these arrangements vary in quality and risk, a carefully reviewed rent-to-own agreement can give you time to save while securing today’s purchase price.

7. Buy a Pre-Construction Condo with an Extended Deposit Structure

In the GTA condo market, many pre-construction builders offer extended deposit structures—like 5% down now, and another 10% paid over 12–24 months. This gives buyers time to save while locking in a property. You’ll still need the down payment eventually, but spreading it out can make it more manageable.

Final Thoughts: It Can Be Done

Buying a home with no down payment in Toronto or the GTA isn’t easy—but it’s not impossible. Whether you're using a gifted down payment, a government program, or a flex down mortgage, the key is understanding your options, planning strategically, and working with professionals who know the local landscape inside and out.

That’s where we come in.

The Johnson Team is one of the top-performing real estate teams in the Greater Toronto Area, known for our reputation, market expertise, and unmatched service. Led by Jeff and Liz Johnson, we help home buyers like you navigate every step of the process—from financing and neighbourhood selection to negotiations and closing.

We understand the unique challenges of buying in Toronto, and we’re ready to guide you through your options, connect you with trusted lenders, and show you homes that actually fit your budget—even if you don’t have a down payment saved today.

Let’s find your way into the market together.

To start working with an agent right away, contact us. We’re ready when you are.