How Much Down Payment Do I Need to Buy a Home in Alberta?
The short answer: in Alberta you need a minimum of 5% down on the first $500,000 of a home’s price, 10% on the portion between $500,000 and $1.5 million, and 20% on any home priced at $1.5 million or more. Down payment rules in Alberta are the same federal rules that apply across Canada — there is no separate provincial minimum.
The minimum down payment, broken down
Canada’s minimum down payment is tiered by purchase price:
- Homes up to $500,000 — 5% of the purchase price.
- Homes between $500,000 and $1.5 million — 5% on the first $500,000, plus 10% on the portion above $500,000.
- Homes of $1.5 million or more — 20% of the full purchase price.
So for a $400,000 home, the minimum is $20,000. For a $700,000 home, it is $25,000 (5% of the first $500,000) plus $20,000 (10% of the next $200,000), or $45,000 in total.
Under 20% down? You will pay for mortgage insurance
If your down payment is less than 20% of the price, your mortgage is “high-ratio” and must carry mortgage default insurance — from CMHC, Sagen, or Canada Guaranty. This protects the lender, not you, and the premium is added to your mortgage and paid off over time. It is not a penalty; it is what makes a smaller down payment possible at all. A down payment of 20% or more avoids the insurance premium entirely.
Where your down payment can come from
Lenders want to see that your down payment is yours and that it has been “seasoned” — sitting in your accounts for a stretch of time. Acceptable sources include your own savings, a Tax-Free First Home Savings Account (FHSA), an RRSP withdrawal under the Home Buyers’ Plan, the sale of another property, and a gift from an immediate family member. A gifted down payment is common and perfectly fine, but the lender will ask for a signed gift letter confirming the money does not have to be repaid.
Closing costs are separate
One thing first-time buyers often miss: your down payment is not the only cash you need. Budget another 1.5% to 4% of the purchase price for closing costs — legal fees, a home inspection, title insurance, and adjustments. Alberta buyers do get a break here, since the province does not charge a land transfer tax, though there are modest land title registration fees.
A note on changing rules
Mortgage rules in Canada do change from time to time — the price thresholds above were last adjusted in recent years. Always confirm the current figures before you rely on them.
Get your exact number
The tiered math is simple once you see it, but the right down payment for you depends on your goals — buying sooner with less down, or waiting to hit 20% and skip the insurance premium. If you want the exact number for the homes you are considering in Calgary, get in touch and I will walk you through it.