Beem Credit Union president and CEO Brian Harris says lenders should rely less on down payments when assessing mortgage applicants in B.C., while a UBC expert says the requirement still helps manage risk.
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Beem Credit Union president and CEO Brian Harris says the use of down payments as a primary measure of whether people are ready for homeownership has become outdated, as housing costs and living expenses remain high in British Columbia.
Harris said many would-be buyers need to save for years before they can purchase a home. He argued that tying up savings in rent for periods ranging from three to nine years could be used more effectively, adding that he views down payments as “a really outdated way of determining worthiness and readiness for homeownership.”
Harris pointed to survey results showing that saving for a down payment is a major barrier to entering the housing market. He cited a 2025 survey by CPA Canada and BDO Debt Solutions in which 32 per cent of Canadians said saving for a down payment was their main barrier, and he also referenced a September Royal LePage survey of 1,400 newcomers across Canada in which more than half said saving for a down payment was their biggest barrier for homeownership.
To illustrate the pressure on renters, Harris said a family in Metro Vancouver could pay $5,000 a month in rent—an amount he said can be comparable to the monthly mortgage payment on a home worth roughly $1 million, depending on financing terms.
Rather than focusing on down payments as the predominant criterion, Harris said lenders could evaluate mortgage applicants using credit history, spending habits and a track record of rental payment. He also pointed to the move toward consumer-directed finance, or open banking, saying that access to better data insights could help determine how people are spending their money.
Harris said the federal government has established the consumer-driven banking legislative framework and is developing supporting regulations to implement it. He added that there is an opportunity to use demonstrated behaviours and other tools to help people qualify if they have shown good financial behaviours, and argued a more flexible mortgage qualification approach could support broader access to homeownership.
He said an approach that better matches demand with accessibility could help people move out of renting into “whatever form it takes,” including a small home, condo or townhouse, and could also “free up the rental market” for those who are not yet ready to buy.
A real estate expert said the down payment still serves important purposes, even if it is not the only indicator of readiness. Thomas Davidoff, an associate professor and director for UBC’s Centre for Urban Economics and Real Estate, said the benefits of having a down payment—such as indicating the borrower’s capability to make ongoing payments and de-risking the loan for lenders—remain “still true.”
Davidoff said one key advantage is that requiring a down payment makes it harder for a buyer to reach a situation where the property is worth less than what the borrower owes, which he said could reduce the likelihood a borrower walks away and stops paying the mortgage.
Davidoff also said that a down payment helps reduce the amount a buyer needs to borrow, which can lower monthly mortgage payments and borrowing costs. He noted that the current housing downturn indicates prices could fall, which makes higher loan-to-value mortgages riskier.
He said the core to addressing affordability is not changing mortgage qualification rules alone, but increasing supply and growing the economy to boost incomes and purchasing power, saying: “Higher earnings, more houses, that's the recipe.”
Davidoff added that better education, a stronger labour market, more employers and initiatives such as trade diversification in response to U.S. tariffs could help support higher earning potential.
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