Is Buy.ca Legit? A Mortgage Broker’s Review of the “Downpayment Boost”

If you are currently house hunting in the GTA, you have likely been retargeted by ads promising a “Down payment Boost” or cash back at closing. In an opaque industry full of complexity, skepticism is healthy. As a mortgage brokerage, we often get asked: Is this program legitimate, or is it a marketing gimmick?

Here is a deep dive into how it works, the math behind the cash advance, and, most importantly, whether it is the right fit for your financial situation.

The Mechanics: How the “Free Money” Actually Works

The most common question we hear is: “Where does the money come from?”

The answer is simple: Discounting

In a standard Ontario real estate transaction, the seller typically pays a commission to the buyer’s agent.

  • Traditional Model: The agent keeps the full 2.5% commission.
  • The Buy.ca (aka Cashback) Model: They retain 1% of that commission and rebate the remaining 1.5% back to you upfront.

It is not “magic money”, it is simply a Commission Rebate. This is a legal, regulated practice in Ontario that recycles transaction costs back into the buyer’s pocket.

The Math: A Real-World Example

Does 1.5% actually make a difference? Let’s look at the numbers on a typical starter home.

  • Home Price: $750,000
  • Required Downpayment (min): $50,000
  • The Buy.ca Boost (1.5%): $11,250

For many buyers, that $11,250 covers a good portion of the closing costs, leaving their savings intact for furniture or renovations.

Pros and Cons: An Unbiased Look

Is the Downpayment Boost right for everyone? Not necessarily. It depends on what you value more: Cash savings or traditional hand-holding.

Pros (The Financial Upside) Cons (The Trade-Off)
Immediate Cash Flow: Up to 1.5% cash advance to help close the deal. Partner Network Only: You must use a Buy.ca partner agent (which may not include your agent).
Digital First: Search, booking, and offers are handled through a tech platform. Taking on Responsibilities Directly: As a buyer, you’re expected to attend most of your showings with another agent or via open houses. If you prefer paper contracts and in-person meetings for everything, the digital workflow might feel impersonal.

 

Does It Affect My Mortgage Approval?

This is the critical piece for us at Perch. When you use the Downpayment Boost, clarity is key. The cash advance is declared as borrowed down payment, which is a legitimate use of funds but must be factored into qualifying calculations.

FAQ: Common Questions We Get

Is the cash advance taxable?

Generally, commission rebates given to the buyer of a principal residence are not considered taxable income by the CRA, as they reduce the cost base of the home (verify this with your accountant).

Why do I see mixed reviews online?

When reading Buy.ca reviews, look for verified client testimonials rather than anonymous forum posts to get an accurate picture of the service.

The Verdict

Downpayment Boost and other cashback programs have been around for over 10 years and are legitimate. If you are open to working with a new real estate agent and are okay with taking on some of the tasks that would normally be done in a traditional model in exchange for a commission rebate then it’s something you can consider. Especially if you don’t have enough funds to close on the transaction, then it may be the difference between being able to buy a property or not.