The issue with the 5% vs 20% down relates to CMHC (mortgage insurance). Canadian banks will not do an unconventional mortgage without CMHC (conventional = 20% down). Per CMHC's site:
Here's a flyer explaining Second Homes
http://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/hopr/upload/CMHC-Second-Home.pdfSo essentially as long as the second home is one unit - you theoretically can purchase with 5% down***
Also just to note:
http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_003.cfm•You will typically have a down payment of at least 5% of the purchase price of the dwelling, depending on the dwelling type. •Single-family and two-unit dwellings (5% minimum down payment)
•Three- or four-unit dwellings (10% minimum down payment)
***Per discussions with my banker, it's becoming more difficult to get a second home insured with CMHC (which results in having to put down 20%)
You could refinance your current home - assuming you have 20% equity (the bank/CMHC will be the ones to determine that) the bank will then remove your home from CMHC - Making it easy for you to buy your second home with 5% down. (Note you'll likely have breaking fees etc - but if you blend/extend the bank will likely wave all or most of these fees for you) Then it will just be a matter of qualifying for the additional mortgage... I assume you've ran the numbers, and your current home will be profitable as a rental (Both NI&CF are positive?) I would not be doing this on speculation that your home will aprreciate in the short term (<5 years) Also note: you'll incur CMHC fees again on the new property.
However I'd read this blog a bit before buying a second home in Vancouver.
http://www.greaterfool.ca/ (Personally I wouldn't want to be buying in Vancouver at the moment)
TL:DR - Yes it's possible to get a 2nd home in Canada with 5% down - make sure you're comfortable with such a high exposure to RE and that your rental will be profitable. May I suggest you consider starting a second thread breaking down your rental plans (Ie what the costs are, expected Revenue etc) so that more seasoned RE investors might point out potential pitfalls you're not considering.