CATEGORY: Edmonton Homebuying Guide
AUTHOR: Christy Tien Le, REALTOR® | eXp Realty

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Buying a home in Edmonton means preparing for both your down payment and separate closing costs. If you save only the down payment, legal fees, inspection costs, and adjustments due at closing can catch you short.

STEP 01 — CALCULATE THE MINIMUM DOWN PAYMENT

According to the Financial Consumer Agency of Canada (FCAC), the minimum depends on the home's price. For a home priced at $500,000 or less, it is generally 5%. For a higher price within the applicable tier, it is 5% of the first $500,000 plus 10% of the amount above $500,000. Higher priced homes have different requirements. Confirm the rules that apply to your purchase with your lender before making an offer.

Two examples: On a $400,000 home, 5% is $20,000. On a $600,000 home, 5% of $500,000 plus 10% of $100,000 totals $35,000. These are price-based minimums; a lender may require more for your application.

STEP 02 — UNDERSTAND MORTGAGE LOAN INSURANCE

If your down payment is less than 20%, mortgage loan insurance is generally required, subject to the lender's and insurer's rules. It protects the lender rather than the buyer. In some cases, the premium can be added to the mortgage. Ask your lender or broker to show you the resulting loan amount and payments.

STEP 03 — SET MONEY ASIDE FOR CLOSING COSTS

FCAC suggests preparing about 1.5%–4% of the purchase price for upfront costs in addition to your down payment. Depending on the property and transaction, these may include legal fees, a home inspection, title insurance, property tax adjustments, and other financing or moving costs. Ask your lawyer and lender for estimates specific to your purchase.

In Alberta, transferring ownership and registering a mortgage involve Land Titles. Fees may change; your lawyer can explain the applicable registration charges in your closing statement.

STEP 04 — DOCUMENT THE SOURCE OF YOUR FUNDS

Your lender may request bank statements and proof of where your down payment came from. If the money is a family gift, proceeds from a sale, or funds moved from another account, ask early which documents you must provide. Check with your lender before making several last-minute transfers that may be harder to document.

STEP 05 — MAKE A BUDGET BEFORE VIEWING HOMES

01. Ask your lender what down payment applies to your situation.
02. Get an estimated monthly payment, including insurance premiums if applicable.
03. Set aside money for closing and moving costs.
04. Gather documents showing the source of your down payment.
05. Keep an appropriate reserve after you purchase.

For the next steps, read the mortgage pre-approval guide and my Edmonton homebuying guide.

FREQUENTLY ASKED QUESTIONS

CAN YOU BUY WITH A 5% DOWN PAYMENT?

Some eligible homes and borrowers may qualify, but it does not apply to every purchase. Your lender must confirm the minimum and whether you qualify.

DOES THE DOWN PAYMENT INCLUDE LEGAL FEES?

No. Plan for closing costs separately from the down payment.

Christy Tien Le, REALTOR® | eXp Realty
christytien.le@exprealty.com

SOURCES: FCAC — down payments; FCAC — homebuying costs. This is general information; confirm current fees and financing requirements for your transaction.