Saving for a down payment is often the hardest part of buying a home.  Did you know that there is a program that would allow you to borrow the down payment in order to get into your new home sooner than you may have thought.

The Flex Down program allows you to use borrowed funds towards your down payment.  Here are a few key points to consider:

Acceptable Loan Purpose & Down Payment amounts required:


  • 5% to 9.9% down – where any portion of the down payment may be from borrowed resources
  • Property Value ≤ $500,000 –5% down payment required.
  • Property value > $500,000 and < $1,000,000 – 5% down payment required up to $500,000, with an additional 10% down payment on the portion of the home value above $500,000.
    (ie: 600k purchase price, would have a minimum down payment of 35k (5% of 500k + 10% of 100k = 25k + 10k = 35k total down payment)

Types of Properties that are Eligible 

  • Owner Occupied
  • maximum of 2 units, where 1 of the units must be owner occupied
  • Existing resale properties
  • New construction (property must be covered by Lender approved New Home Warranty Program
  • marketable residential dwellings, located in markets with demonstrated ongoing re-sale demand
  • Estimated remaining economic life of the property should be a minimum of 25 years.

Maximum Property Value

  • The property purchase price up to $999,999 (max)

Qualifying Interest Rates and Mortgage Terms

  • Maximum interest rate term of 25 years
  • Stress Test; your mortgage contract rate plus 2%
  • Fixed, Standard variable, capped variable and adjustable rate mortgages are all permitted

Amortization options

  • Up to 25 years (max)

Mortgage Insurance Premium

The mortgage insurance premium is added to the total mortgage amount. The premium payable is the lesser of the premium as a percentage of the total new loan amount or the premium as a percentage of the top-up portion on the additional loan amount (if you have an existing insured mortgage already).  Here are the applicable premium rates below:

  • Down payment = 5% – 9.99%
  • Premium Rate = 4.50%
  • Top Up Premium Rate = 6.60%

The mortgage insurance premium is non-refundable, it may be added to the mortgage or paid at the time of closing.

How to Qualify

Income & Employment

  • standard income and employment verification requirements apply

Credit Worthiness

  • Minimum credit bureau score of 650 +

Down Payment

  • Qualified home buyers are able to use non-traditional sources of down payment including borrowed sources that are “arm’s length” to the purchase or sale transaction, such as personal loans, lines of credit or even credit credits, as well as gifts from individuals who are not related to the borrower through a familiar or legal relationship.
  • The loans would be included in the lending ratios for qualifying purposes.

Additional Criteria

  • Non-residing guarantors are not permitted
  • Non-residing co-Borrowers acceptable (they must be an immediate family member and on title)
  • The lender will require proof of closing costs, represented as 1.5% of the purchase price from your own resources. 
  • You must fully qualify for the new purchase and borrowed down payment as part of the debt service ratios 

Eligible Products

  • Purchase Plus Improvements
  • Progress Advance Program
  • Vacation / Secondary Homes Program (Type A Properties)

Ineligible Products

  • Business for Self (Alt. A) Program
  • Family Plan Program
  • New to Canada
  • Vacation / Secondary Homes (Type B properties)
  • Investment property
  • Second mortgages

Example/case study: 

John and Sandy earn $150,000 combined income 

  • They have zero debts and zero monthly liabilities 
  • They minimal savings after paying off their student loans 

They want to buy a condo in Downtown Toronto

Purchase price: $550,000 – $30,000 (borrowed min down payment) = $520,000 + $23,400 high ratio insurance premium 

= $543,400 total mortgage 

At 5.49% with 25yr am = $3,313 per month 

  • Estimated condo fees of $400 a month 
  • Estimated property tax of $2300 annual 

Total cost per month = $3,904 all in per month

This way John and Sandy are in the market with “$0 down” and will benefit from future appreciation growth – and will be that much closer to owning their dream home in 3-5 yrs.