Case Study · Residential / Prime

A Parent's Gift for the 5%: A Credit Union's Insured Mortgage Bought a First Home in Langley at 95%

Our client, married, works in IT infrastructure for a national supermarket chain, earning about $109,500, and wanted to buy a first home: a top-floor one-bedroom condo in Langley priced at $440,000. The client's spouse, who does not work, chose to stay off the mortgage.

Closed in 2023 · Published October 17, 2026

Residential
Credit union
Insured
Purchase
First-time buyer
Gift

Purchase price: $440,000
Mortgage: $418,000 plus a $16,720 premium
Down payment: $22,000, a gift
Loan-to-value: 95%
Rate in 2023: about 4.6%, five-year fixed

The Situation

The Challenge

The whole 5% down payment, $22,000, was a gift from a parent, the job was less than two years old, and the client had about $2,000 set aside for closing costs.

The Solution

In 2023 we placed an insured mortgage with a credit union: $418,000 plus the default insurance premium of $16,720, $434,720 in all, on a five-year fixed term at about 4.6% with a 25-year amortization. The credit union accepted the gifted down payment, counted nearly four years in the same field before the current job, set aside a car loan with two payments left, and accepted the smaller closing fund because, as a first-time buyer in BC, the client paid no property transfer tax, leaving legal fees of about $1,500. The debt-service ratios came in at about 36% and 44%.

The Outcome

The client owns a first home with 5% down, none of it borrowed, on a five-year fixed payment.

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Mortgage Insurance Calculator

This purchase was insured with 5% down. See the default-insurance premium on your own price and down payment.

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Step 1 · Your purchase

Insurance program

Borrowed down payment (Flex 95) — borrowing your 5% down payment from a line of credit or loan is allowed with strong credit. It raises the 5%-down premium from 4.00% to 4.50% (the loan payment counts in your debt ratios). Only affects purchases with less than 10% down.

Purchase price

Buying new construction? Enter the price including the 5% GST — insurers calculate the premium on the GST-inclusive price. Insured mortgages cap at $1,499,999 (20% down required at $1.5M+).

Down payment

10% = $90,000

Amortization

Province

PST on the insurance premium is paid at closing in ON (8%), QC (9%) and SK (6%). Other provinces: none.

Insurance premium

$25,110

3.10% of $810,000 loan @ 90.0% LTV

Breakdown

Purchase price$900,000

Down payment$90,000 · 10.0%

Loan before insurance$810,000

Insurance premium (3.10%)$25,110

Total insured mortgage$835,110

Premium can be added to (financed in) the mortgage. PST on the premium, where applicable, is paid in cash at closing.

Premium curve · 8% → 25% down

Watch how the insurance premium drops as you raise your down payment — it hits $0 once you reach 20% (no insurance needed). The curve starts at this home's federal minimum down payment. The marker shows where you are right now.

What this calculator does that most don't

Charges the provincial sales tax on the premium where it applies (ON 8%, QC 9%, SK 6% — Manitoba removed its in 2020) — due in cash at closing, which most calculators quietly omit
Standard insured AND Sagen Insured Stated Income (self-employed) in one tool — switch the program to see the higher stated-income premium
Knows the December 2024 rules: max insured price $1,499,999 (high-ratio, under 20% down — not to be confused with the $999,999 insurable cap) and the first-time-buyer OR new-build gate on 30-year insured amortization, with the 0.20% surcharge applied

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Questions and answers

Questions about this file

Can a gift cover the whole down payment?+

In this 2023 file it did: a parent gave the whole 5%, $22,000, and a credit union's insured mortgage accepted it.

Does a job under two years old stop a mortgage?+

Not here. The credit union counted nearly four years in the same field before the current job.

What did the mortgage insurance cost?+

The default insurance premium was $16,720, added to the $418,000 mortgage for $434,720 in all.

How much cash did closing take?+

As a first-time buyer in BC, the client paid no property transfer tax, which left legal fees of about $1,500, and the credit union accepted a closing fund of about $2,000.

What were the terms?+

A five-year fixed term at about 4.6% in 2023 with a 25-year amortization, at debt-service ratios of about 36% and 44%.

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