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How much cash do you really need to buy?

On an $850,000 Walnut Grove townhouse, a first-time buyer needs about $75,850 in cash with the minimum down payment, or about $185,850 with 20% down. The down payment is only part of it: the Property Transfer Tax, legal fees and a few other costs are due on completion day too.

The down payment

With mortgage insurance, you can buy with less than 20% down: as little as 5% on the first $500,000 of the price, plus 10% on the portion above that, up to $1,500,000. On an $850,000 home, the minimum is 5% of $500,000 ($25,000) plus 10% of $350,000 ($35,000): $60,000.

At $1,500,000 and above, mortgage insurance isn’t available, so you need a full 20% down, and on a home priced right at that line the required down payment jumps by tens of thousands of dollars. Below 20%, the insurance premium is added to your mortgage, and BC charges no sales tax on it.

The cash that isn’t the down payment

This is the part that surprises people: a separate pile of cash, due on completion day, on top of the down payment.

  • Property Transfer Tax: 1% on the first $200,000, 2% to $2M, 3% to $3M, then 5% above that. The first-time-buyer or newly-built exemption can erase or reduce it under the price thresholds. Run your number.
  • Legal or notary fees: about $1,500–$2,000 to handle the conveyance, which is what my buyers typically pay.
  • Title insurance, inspection, adjustments: title insurance ($200 to $1K), a home inspection ($500–$800), and prepaid property-tax and utility adjustments at completion.
  • GST: only on a new or presale home (5%); the first-time-buyer rebate often removes it. Resale homes carry none.
The deposit is due within a day of removing subjects

The deposit isn’t an extra cost, because it counts toward your down payment. But it comes due weeks before completion. It is commonly 5% of the price, payable within 24 hours of removing subjects by bank draft or wire, and held in the brokerage’s trust account until closing. On that $850,000 townhouse, about $42,500 must be reachable within a day. Money sitting in a locked-in term or still in an FHSA withdrawal queue is the usual reason that day gets tense.

An $850,000 townhouse, two ways

The same first-time buyer, the same resale townhouse in Walnut Grove, two down payments:

CostMinimum down20% down
Down payment$60,000$170,000
Property Transfer Tax*~$11,800~$11,800
Legal, title, inspection, adjustments~$4,050~$4,050
All-in cash~$75,850~$185,850

*At $850,000 the first-time-buyer PTT exemption is in its phase-out band, so roughly $3,200 of the $15,000 standard PTT is forgiven (about $11,800 owing). An illustration: your numbers depend on the home, your down payment and the programs you qualify for. The insurance premium (about $31,600) is added to the mortgage, not paid in cash, and BC charges no sales tax on it.

The help that lowers your number

If you’re a first-time buyer, several programs reduce the cash you need, and they can be used together.

  • First-time-buyer PTT exemption: erases the Property Transfer Tax on a resale home to $500,000, with a reducing benefit up to $860,000.
  • New-home GST rebate: on a new build, the new First-Time Home Buyers’ GST Rebate removes the full 5% GST up to $1,000,000. How the GST rebate works.
  • FHSA & Home Buyers’ Plan: build and draw your down payment with real tax advantages; a couple can stack both.

The first-time home buyer guide walks every one of these in order.

Three calculators do this math for you

Affordability ›Property Transfer Tax ›Closing costs ›

You qualify at a higher rate than you’ll pay

Lenders run a stress test: they check you could still afford the payment at a rate a couple of points above your actual one. So you qualify for a little less than the raw math suggests. Check this before you fall for a home at the top of your budget.

Common questions about the cash to buy

  • How much money do I really need to buy a home in the Lower Mainland?
    More than the down payment alone. Beyond it you’ll need Property Transfer Tax, legal or notary fees, title insurance, and an inspection. If you put less than 20% down, the mortgage insurance premium is added to the loan and BC charges no sales tax on it, so it adds no cash. As a rough guide, on an $850,000 townhouse a first-time buyer needs about $75,850 all-in with the minimum down payment, or roughly $185,850 with 20% down. The exact number depends on the price, your down payment, and which first-time-buyer programs you qualify for.
  • What is the minimum down payment in BC?
    With mortgage default insurance, the minimum is 5% on the first $500,000 of the price, plus 10% on the portion from $500,000 up to $1,500,000. On an $850,000 home that’s 5% of $500,000 ($25,000) plus 10% of $350,000 ($35,000), a $60,000 minimum. At $1,500,000 and above, insurance isn’t available, so you need 20% down. The $1,500,000 insured cap was raised from $1,000,000 on December 15, 2024.
    Mortgage default insurance (from CMHC, Sagen, or Canada Guaranty) lets a buyer purchase with less than 20% down by insuring the lender against default. The premium is a percentage of the mortgage that rises as your down payment shrinks: roughly 4.00% of the loan at 5%–9.99% down, 3.10% at 10%–14.99%, and 2.80% at 15%–19.99% (confirm current rates with CMHC). The premium is added to your mortgage rather than paid in cash, and BC charges no sales tax on it (Quebec, Ontario and Saskatchewan do). Above the $1,500,000 cap, no insurer will cover the loan, so a 20% down payment is required.
  • What costs land at completion besides the down payment?
    The biggest is usually Property Transfer Tax: 1% on the first $200,000, 2% from there to $2,000,000, 3% from $2,000,000 to $3,000,000, and 5% on anything above $3,000,000 (a first-time-buyer or newly-built exemption can erase or reduce it under the price thresholds). Then legal or notary fees ($1,500–$2,000), title insurance ($200 to $1K), a home inspection ($500–$800), and prepaid property-tax and utility adjustments. Plan for roughly $5,000–$15,000 of these on top of your down payment, and on a new home, GST as well (with the first-time-buyer rebate often removing it).
  • Does the down payment include closing costs?
    No, and this is the single most common surprise for first-time buyers. The down payment is your equity in the home. Closing costs (Property Transfer Tax, legal fees, adjustments) are a separate amount of cash due on completion day. The closing-day cash calculator adds both together for a specific purchase.
  • What can reduce the cash I need?
    Quite a lot, if you’re a first-time buyer. The BC first-time-buyer PTT exemption can erase the Property Transfer Tax below the price thresholds. On a new home, the First-Time Home Buyers’ GST Rebate removes the full 5% GST up to $1,000,000. And the FHSA and Home Buyers’ Plan let you build and draw your down payment with tax advantages. Used together, they change the number you need.
  • Do I need more cash to buy a new or presale home?
    Sometimes, because new homes carry 5% GST that resale homes don’t. For a qualifying first-time buyer, the GST rebate removes the full 5% on a new home up to $1,000,000 (a reduced rebate to $1,500,000). Presales also have their own deposit structure (often staged over the construction period) rather than a single down payment at completion. It’s worth modelling a new build and a resale side by side before you decide. The cash timing is quite different.
Sources: CMHC, Government of Canada(2)
Sources: BC Government(1)
Sources: CRA, Government of Canada(6)
Sources: CRA(1)

Bronson Job PREC, REALTOR® at Momentum Realty Inc.. GVR Member #6015742 · FVREB Member #FJOBBR

Last reviewed by Bronson Job PREC, REALTOR®. Licence CC BY 4.0. How we verify.

I’m Bronson Job, a REALTOR® (PREC) with Momentum Realty Inc., so I earn a commission when I help someone buy or sell. This is general information, not advice on your situation, and I take no payment from any third party named here. How I verify.