How Much Down Payment Do You Need for Your Next Home?

How much down payment do you actually need for your next home? If you're picturing a steep 20% and feeling discouraged before you've even started, take a breath — that number usually only applies if you're buying a rental property, not the home you'll actually live in.

The 20% Down Rule Isn't What You Think

You've probably heard that a second home requires 20% down, and that's technically true — but only in one specific situation. That 20% threshold applies when the property you're buying is a rental or investment property, something you won't be living in yourself.

That's a very different scenario from what most people mean when they talk about their "next" home. If you're not adding a second address to your life but instead moving from the home you're in now to a new one, different rules apply.

Moving Up? You May Only Need 5% Down

If you're living in your current home and simply making the move to the next one, you don't need to hit that 20% mark. In many cases, all you really need is 5% down, depending on your specific mortgage qualifications.

That's a meaningful difference. On a $500,000 home, the gap between 5% and 20% down is $75,000 — money that, for many move-up buyers, doesn't need to sit in a savings account before they can make their next move. Your qualification details (income, credit, existing equity, and the specifics of your mortgage product) will determine exactly what you're eligible for, so this is always worth confirming with your mortgage professional before you set a savings target.

Why This Matters When You're Planning Your Move

This distinction matters most when you're thinking about moving up in the housing market — trading a starter home for something bigger, or repositioning into a new neighbourhood. The idea of saving 20% on top of everything else involved in a move can feel daunting enough to stall the whole plan before it starts.

But if you're transitioning from one primary residence to another, that 20% figure usually isn't the number you should be planning around. Understanding the real requirement — often as little as 5% down — can change the entire timeline for your next move. A goal that once felt years away might actually be closer than you think.

It's also worth remembering that your existing home equity can play a role here too. If you've built equity in your current property, that can factor into your down payment on the next one, further narrowing the gap between where you are now and where you want to be.

The Bottom Line

Don't let an inflated down payment number talk you out of your next move before you've even looked at the numbers. The 20% rule is real, but it's built for rental properties — not for someone moving from one home to the next. If you're planning your next step, it's worth having a conversation early, before assumptions about what you "need to save" shape decisions that don't actually apply to your situation.

Ready to Talk About Your Next Move?

Wondering how much down payment you'd actually need based on your own situation? Every buyer's numbers look a little different, and the only way to know for sure is to walk through your specific mortgage qualifications.

I'm Nicole, a Realtor with Your Winnipeg Realtor, and I help Winnipeg homeowners figure out exactly what a move up in the market looks like for them — down payment included. If you're thinking about your next home, reach out and let's talk through what your move could look like.