Conexus - Down payments

What is it?

This mortgage option gives you the ability to choose between fixed and variable rates, open or closed plans, and to set the repayment schedule that best suits your lifestyle. It also has extra features like the ability to pay off your mortgage faster or skip-a-payment if needed. In short, our Flex Feature Mortgage puts you in control and gives you the power to customize your ideal mortgage solution.

Who is this for?

In Saskatchewan, the typical minimum down payment is 5% of the home’s purchase price, however, aiming for 20% is recommended. When you buy a home in Saskatchewan, you usually need to pay a down payment, which is a percentage of the home’s price you pay upfront. It’s like a promise that you’ll pay the rest later.

For homes up to $500,000: You must put down at least 5% of the home’s price.
For homes between $500,000 and $999,999: You need to put down 5% for the first $500,000, and then 10% for the part of the price over $500,00.
For homes $1 million or more: You need to put down at least 20%

If your down payment is less than 20%, you’ll have to get mortgage loan insurance, which protects your financial institution in case of default. Down payments can come from savings, borrowed, or as a gift from a family member.

Saving for a down payment

There are many ways you can save for your down payment including a savings account, Tax-Free Savings Account, or a First Home Savings Account (for first time homebuyers only). If you have a Registered Retirement Savings Plan (RRSP), you can use some of the money as a down payment.

Tax-free savings account (TFSA)

A TFSA is a flexible savings tool where you can save money and any earnings grow tax-free.

Things to know:

✔ When you withdraw your money, you won’t pay any taxes on it

✔ There is a maximum amount you can contribute to your TFSA each year

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First Home Savings Account (FHSA)

A registered savings account designed to help first-time homebuyers save for their first home.

Things to know:

✔ All contributions are tax-deductible, and tax-free.

✔ You can save up to $40,000 ($8,000 annually).

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Registered Retirement Savings Plan

This account allows you to save for retirement, however, funds can also be used by first-time homebuyers for a down payment.

Things to know:

✔ You can withdraw up to $35,000 tax free from your RRSP under the Home Buyer’s Plan.

✔ You will have to repay the amount back to your RRSP, within 15 years from withdrawal.

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You might be able to receive a gift from someone to help you with your down payment. However, there are some rules by the government regarding who can give you this gift.

It’s important to be aware that not everyone can provide a down payment gift, including friends, business partners, and other non-family members.

When receiving a down payment gift, it’s important to document the transaction to be able to provide it to your financial institution and any other government regulators. Documentation should include a gift letter signed by both the donor (the person providing the gift) and the recipient (homebuyer), stating that the money is a gift and not a loan, names of individuals and their relationship to each other. Additionally, you may need to provide proof of the transfer of funds, such as bank statements.

Before you accept a down payment gift, consult with a Mobile Mortgage Specialist or financial advisor to ensure you understand all requirements and implications involved.

Family members: You can receive a down payment gift from certain family members, including parents, grandparents, siblings, aunts, and uncles. The gift must be a genuine gift and not a loan that you're expected to pay back.

Fiance or Spouse: If you’re engaged to be married or already married, your fiancé or spouse can provide you with a down payment gift.

Common-law partner: In some cases, if you’re in a common-law relationship, your partner may be allowed to gift you money for the down payment. There are rules regarding common-law relationships that vary by province, so it’s important to check specific regulations related to your location.

Getting a loan for a down payment

If you’re looking to enhance your down payment, you can explore different loan options. However, it’s important to approach this with caution as loans come with the responsibility of repayment and accrued interest. If you get a loan for your down payment, this could affect how much you qualify to borrow for a mortgage.

Line of credit

Lines of credit are a flexible form of borrowing that allow you to access a set credit limit as needed.

Things to know:

✔ WInterest rates and terms vary

✔ You only pay interest on the amount you borrow

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Personal loan

A personal loan provides you with a lump sum that you repay through regular payments over a predetermined length of time.

Things to know:

✔ Interest rates and terms vary.

✔ Once repaid, you will need to apply for another loan if you want to borrow additional money.

Learn more