Buying a home is a dream for many Albertans, but the biggest challenge for most first-time buyers is saving up for a down payment. With rising home prices and the cost of living increasing, the idea of buying a home in alberta with no money down sounds appealing—but is it actually possible?
The short answer is yes, but with limitations. While traditional lenders require a minimum down payment, there are alternative financing options that can help you buy a home in Alberta with little to no upfront cash. In this guide, we’ll break down what no-money-down home buying really means, available programs, and potential risks.
Can You Buy a Home With No Down Payment in Alberta?
In Canada, lenders typically require a minimum 5% down payment for homes under 500,000. However, there are ways to buy a home without having to save up thousands of dollars in advance. The main methods include:
- Borrowing your down payment – Using a loan, line of credit, or gift
- Government assistance programs – First-time homebuyer incentives
- Seller financing – Arrangements directly with the seller
- Rent-to-own programs – Gradual homeownership options
While these methods make homeownership more accessible, they come with risks and extra costs. Let’s explore each option in detail.
Borrowing the Down Payment (Flex Down Mortgage Program)
If you don’t have savings for a down payment, some lenders allow you to borrow the amount through:
- A personal loan
- A home equity line of credit (HELOC) (if you own another property)
- A credit card advance (not recommended due to high interest)
This is known as the Flex Down Mortgage Program, offered by some lenders in Canada. The key requirements include:
- Strong credit score (typically 680+ required)
- Stable income to qualify for a mortgage plus a loan
- Low debt-to-income ratio (your monthly debt payments should be manageable)
Risks:
- Higher debt load, increasing your monthly payments
- Additional interest payments on the borrowed amount
- Not all lenders allow this option
Learn more: Canada Mortgage and Housing Corporation (CMHC)
First-Time Home Buyer Incentives and Grants
The Government of Canada and Alberta offer programs to help first-time buyers afford a home with lower upfront costs.
First-Time Home Buyer Incentive (FTHBI)
The FTHBI is a shared equity program where the government contributes 5% (resale homes) or 10% (new builds) toward your home purchase, reducing your mortgage payments.
- No monthly payments required
- Helps lower mortgage costs
- Must be repaid when you sell (or after 25 years)
Not a “no money down” program, as a 5% down payment is still required
Learn more: Government of Canada – First-Time Home Buyer Incentive
First Home Savings Account (FHSA)
A tax-free savings account where first-time buyers can contribute up to 8,000 per year (max 40,000) toward their down payment.
- Tax-free withdrawals for a first home
- Government incentives help your savings grow
Requires time to save up
Learn more: First Home Savings Account (FHSA)
Gifted Down Payment (From Family or Friends)
If you have generous family members, many lenders allow gifted funds for a down payment. This is common among first-time buyers.
- No repayment required (must be a true gift, not a loan)
- Helps you qualify for a mortgage faster
Must provide a gift letter confirming the money is not repayable
Lenders may still assess your ability to afford homeownership
- Seller Financing and Rent-to-Own Options
Seller Financing (Vendor Take-Back Mortgage)
Instead of borrowing from a bank, some home sellers act as the lender and allow buyers to pay for the home over time.
- Can be an option if you don’t qualify for a traditional mortgage
- Negotiable interest rates and terms
Rarely available (only some sellers offer this)
Interest rates may be higher than bank rates
Learn more: Vendor Take-Back Mortgages Explained
Rent-to-Own Programs
Some companies and private sellers offer rent-to-own agreements, where you rent the home while gradually building equity.
- Helps buyers without a down payment or strong credit
- Part of your rent goes toward the home purchase
Higher monthly costs than regular renting
If you fail to qualify for a mortgage by the end of the contract, you lose the money paid toward ownership
Check out: Homeowners Soon Rent-to-Own Program
Risks and Things to Consider Before Buying With No Money Down
While buying a home with no down payment is possible, it comes with trade-offs:
- Higher mortgage payments – Borrowing a down payment means larger monthly expenses.
- Increased interest costs – The more you borrow, the more interest you pay over time.
- Tighter lender restrictions – You may need a higher credit score and income to qualify.
- Risk of negative equity – If home prices drop, you could owe more than the home is worth.
If you can save at least a 5% down payment, you’ll have better mortgage terms, lower monthly payments, and less risk.
Final Thoughts: Is Buying a Home With No Money Down the Right Choice?
Buying a home in Alberta with no down payment is possible, but it requires careful planning. While options like borrowing a down payment, government incentives, and rent-to-own programs can help, they come with added costs and risks.
Before choosing a no-money-down option, consider:
- Can you afford the higher monthly costs?
- Do you have stable income and a good credit score?
- Are there better options (e.g., saving for a 5% down payment)?
For expert guidance on your home-buying options, speak with a mortgage broker or financial advisor. They can help you determine the best path to homeownership without putting yourself at financial risk.
Helpful Resources for Alberta Home Buyers
Looking to buy a home in Alberta? Explore your financing options today and start your journey toward homeownership!
If you would like to chat with Kelly about your real estate opportunities in Calgary, send a message here: www.kellymacdonald.ca/contact
