What is an initial deposit, and how much do I need to have in my account?

A down payment is part of the cost of a home that the buyer pays from their own funds when purchasing real estate, before taking out a mortgage loan. It serves as a guarantee for the lender (bank or financial institution) and reduces the risk of default on the principal amount of the loan. The larger the down payment, the lower the monthly payments and the interest rate on the loan.

Basic principles of down payments in Canada

  1. Minimum requirements

  • For homes costing up to CAD 500,000, the minimum down payment is 5% of the purchase price.

  • For homes costing between CAD 500,000 and CAD 999,999:

  • 5% on the first CAD 500,000;

  • 10% on the amount over CAD 500,000.

  • For homes worth CAD 1,000,000 or more — a minimum of 20% of the total cost.

  1. Mortgage insurance (CMHC Insurance) If your down payment is less than 20%, the loan must be secured by mortgage insurance (CMHC or another provider), which adds an insurance premium to the cost (approximately 2% to 4% of the loan amount, depending on the size of the down payment).

  2. Funds for a deposit during the offer In addition to the down payment, when submitting an offer, the buyer usually makes a deposit — a “security deposit” to the seller, which ranges from 3% to 5% of the price. These funds are held by an escrow agent and are included in the total down payment.

  3. Additional closing costs In addition to the down payment, you should have 1.5%–4% of the property value in your account to cover:

  • Legal fees (notary, lawyer).

  • Land transfer tax.

  • Home insurance from the start of the transaction.

  • Small expenses for property appraisal and interest for the period until the first payment.

How much do you need to save for a deposit in Calgary

In Calgary (Alberta), the real estate market is relatively affordable compared to large cities — the average price of a family home is around CAD 550,000, and condos are around CAD 300,000.

Type of housing Average price (CAD) Minimum down payment Example deposit (3%) Example additional costs (2%)
Condominium 300,000 5% → 15,000 9,000 6,000
Single-family home $550,000 5% on the first $500,000 = $25,000
10% on $50,000 = $5,000 → $30,000		 $16,500 $11,000

Thus, to make a serious offer in Calgary, you need to have:

  • At least 5% of the cost of the future home as a down payment (from CAD 15,000 for a condo and from CAD 25,000 for a single-family home of average value).

  • An additional 3% deposit of the price, which is blocked in escrow (from CAD 9,000 for a condo and CAD 16,500 for a house).

  • Another 1.5%–4% (from CAD 4,500 to CAD 11,000) to cover legal and operational costs.

Down payment savings strategy

  1. Budgeting and savings accounts Open a separate high-interest savings account to accumulate your down payment.
  2. Automatic transfers

Regularly transfer a fixed percentage of your income to this account automatically. 3. Investment tools Consider guaranteed investment certificates (GICs) or a moderate-risk portfolio to grow your savings, but keep enough liquidity to be able to make your deposit on time.

  1. Alberta and federal programs Check out available first-time home buyer incentive programs that allow you to reduce your down payment or receive a tax credit.

Conclusion

The final amount you need to have for a deposit in Calgary depends on the type of home and your financial plan, but the minimum requirements are as follows:

  • For a condominium, approximately $15,000 CAD (down payment) + $9,000 CAD (deposit) + $4,500 CAD (closing costs) = $28,500 CAD.

  • For a single-family home, approximately $30,000 CAD (down payment) + $16,500 CAD (deposit) + $11,000 CAD (closing costs) = $57,500 CAD.

Determine your financial goals, take advantage of savings tools and support programs, and gradually accumulate the necessary funds to successfully enter the Calgary real estate market.