Lenders require proof of where the down payment came from, whether that is savings, a gift, or a withdrawal through the Home Buyers' Plan or a First Home Savings Account. Buyers putting down less than 20 percent also pay a mortgage default insurance premium through CMHC, Sagen or Canada Guaranty, plus provincial sales tax on that premium at closing.
Budgeting only the down payment and forgetting the closing-day costs is the most common surprise for a first-time buyer. Legal fees, the inspection, and adjustments for prepaid property tax all come due at once.
Joel Dyck builds a full cash-needed-at-closing number with buyers before they make an offer, not just the down payment on its own. Get your hand-reviewed valuation from Joel Dyck.