The biggest myth in Canadian real estate is that you need tens of thousands of dollars saved before you can buy a home. The reality? Multiple government programs across Canada will literally hand you your down payment—interest-free, sometimes forgivable.
We see it every week: qualified buyers who assume homeownership is years away because they don't have $25,000 sitting in a savings account. Then we show them the math, and they're holding keys within 90 days.
The $0 Down Payment Strategy Is Real
Here's how it works in practice. On a $500,000 home in Ontario:
| Component | Amount |
|---|---|
| Minimum down payment required (5%) | $25,000 |
| Government assistance available | Up to $25,000 |
| Your down payment out of pocket | $0 |
You still need to cover closing costs ($8,000–$15,000 depending on location), but the actual down payment—the part most people think takes years to save—can be fully covered.
What closing costs to expect as a first-time buyer
London's Down Payment Assistance: The Gold Standard
The City of London runs one of the most generous programs in Canada. Here are the numbers that matter:
| Feature | Details |
|---|---|
| Maximum assistance | $25,000 |
| Interest rate | 0% — zero |
| Loan forgiveness | 100% after 20 years |
| Coverage | Up to 5% of purchase price |
| Maximum home price | $500,000 |
That's right—if you stay in your home for 20 years, the City of London forgives the entire loan. You pay back nothing.
Compare that to a typical personal loan: borrowing $25,000 at 8% over 20 years would cost you nearly $50,000 in total payments. London's program? $0 in interest. $0 repayment if you stay.
If you're in London or Middlesex County, read our full breakdown of the program with eligibility details and application steps.
Who Qualifies for London's Program
The eligibility requirements are straightforward:
- Must be at least 18 years old
- Cannot currently own a home or residential property (including cottages)
- Total household liquid assets under $100,000
- Income limits: $95,000 single | $115,000 family
- Must be a current renter in London or Middlesex County
- Must be eligible for a mortgage at a recognized financial institution
- Must agree to occupy the home (no renting it out)
Previously owned a home but currently renting? You still qualify. This isn't limited to first-time buyers who've never owned.
The Rent vs. Own Math That Changes Everything
Every month you pay rent, you're building someone else's equity. Here's how the numbers play out over 20 years:
| Scenario | What You've Built After 20 Years |
|---|---|
| Renting at $1,800/month | $0 equity. Rent has increased to ~$3,500. Your landlord owns a paid-off property. |
| Owning with $25K assistance | $300,000+ in equity. Home potentially worth $600,000+. Assistance loan forgiven. |
The difference isn't $1,800 vs. a mortgage payment. The difference is $432,000 in rent payments that disappear forever vs. a home that YOU own.
Other Zero-Down Programs Across Canada
London isn't the only municipality offering assistance. Here are programs worth investigating:
| Program | Location | Maximum Benefit |
|---|---|---|
| London DPA | London, ON | $25,000 (forgivable after 20 years) |
| Habitat for Humanity | National | Interest-free mortgages |
| Welcome Home Program | Various municipalities | Varies by city |
| Indigenous Homeownership | National (CMHC) | Down payment assistance + reduced rates |
| Provincial Programs | BC, AB, ON | Varies — check your province |
The key insight: most of these programs require mortgage pre-approval before you can apply. That's where we come in—we get you approved first, then handle the program applications.
Stack Programs for Maximum Benefit
The zero-down strategy gets even more powerful when you combine it with other first-time buyer programs:
| Program | Benefit |
|---|---|
| London DPA | Up to $25,000 toward down payment |
| First Home Savings Account (FHSA) | Up to $40,000 tax-free |
| RRSP Home Buyers' Plan | Up to $60,000 withdrawal ($120,000 for couples) |
| Ontario Land Transfer Tax Rebate | Up to $4,000 back |
| TOTAL POTENTIAL BENEFIT | $129,000+ |
That's $129,000 in combined assistance, tax savings, and rebates. For a couple, it's even more.
The Four Steps to Zero Down
The process is simpler than most people expect:
Step 1: Get pre-approved for a mortgage. This is non-negotiable—every government program requires it. We work with 50+ lenders to find your best fit.
Step 2: Find a home within program limits. For London, that's under $500,000. Other programs have different caps.
Step 3: Apply for assistance. Once pre-approved, we submit the program application on your behalf. Most respond within 5 business days.
Step 4: Close on your home. The assistance funds flow directly to your lawyer at closing. You walk in with keys.
What You Still Need to Cover
Zero down payment doesn't mean zero costs. Be prepared for:
| Cost | Typical Range |
|---|---|
| Closing costs (legal, land transfer tax, title insurance) | $8,000–$15,000 |
| Home inspection | $400–$600 |
| CMHC insurance premium (added to mortgage) | 4% of mortgage amount |
| Moving costs | $1,000–$3,000 |
The CMHC insurance premium is the biggest item, but it's added to your mortgage—you don't pay it upfront. On a $500,000 home with 5% down, the premium is approximately $19,000 added to your mortgage balance.
How CMHC insurance works and what it costs
The Opportunity Cost of Waiting
Every year you wait to buy, you face two headwinds:
Rising prices: Canadian home prices have increased in every 10-year period since 1980. Waiting for a "crash" has historically been a losing strategy.
Lost equity: That $1,800/month rent payment builds zero wealth. A mortgage payment at $2,100/month builds roughly $800/month in equity from day one—and that accelerates every year.
If you're investing the difference while renting, that's a valid strategy. But most renters aren't—they're just spending what they would have spent on a mortgage payment anyway.
See how opportunity cost works with our car payment vs. TFSA comparison
Will the Canadian housing market actually crash?
If You Sell Before the Loan Is Forgiven
For the London program specifically, selling before 20 years requires:
- Repayment of the original assistance amount
- Plus 5% of any capital gains (profit on the home)
- Voluntary early repayment anytime with no interest penalty
If you sell at a loss, repayment may be waived entirely.
Bottom line: this program rewards long-term homeownership. If you're putting down roots, it's essentially free money.
Stop Waiting and Start Building Equity
The down payment barrier is the most common reason Canadians delay homeownership. But for buyers in London and many other cities, that barrier has been removed entirely.
Every month you continue renting is a month of equity you're giving away. The City of London is offering $25,000 in free money to help you stop.
The only question is whether you'll take it before the funding runs out.
See If You Qualify for $0 Down
Take our 2-minute quiz and we'll check your eligibility for government down payment programs.
