Down
Payment
A down payment is your first contribution towards owning a home. We will guide you to the best option for your situation.
Different Kinds Of Minimum Down Payment
The following is shortlist of the different down payment minimums in the market, based on different purchase types:
Owner-occupied Home: 5%
On the first $500,000. Plus 10% of the amount above the first $500,000 equals the minimum.
Owner-occupied Home: 20%
Down payment to be made to avoid the CMHC premium*.
*CMHC premium will be as much as 4% of the mortgage if less than 20% down payment is applied.
Rental Property
For most lenders, 20% is the minimum down payment on a rental.
Second Home
A second home for recreation, family or other purposes can be bought with as little as 5% down payment. At 20% down, there is no CMHC/ default insurance fee.
We're ready for you once you're ready to get down to business. We will get to the nitty-gritty of what's the most beneficial to you.
How Down Payment Influences the Mortgage Rates
Less Than 20% Down Payment
This is the Default Insurers'* or 'High Ratio' Default Insured Mortgage.
The lender is protected in case of a payment default by the borrower.
Since the lender bears little to no risk, it can offer some of the best mortgage rates in Canada.
*Default Insurers include Canada Mortgage Housing Corporation or CMHC, Sagen (previously Genworth Canada) and, Canada Guaranty or CG.
20% Down Payment
The borrower would not have to pay the Default Insurer's fee. The lender is no longer protected by the Default Insurers and is thus exposed to default risk. In this regard, the minimum 20% down payment represents the greatest risk a lender can accept. As a result, rates at the 20% mark are typically slightly higher.
25% Plus Down Payment
As the down payment increases, the lender's risk decreases, and rates begin to fall to levels similar to those seen with High Ratio rates. A 25% down payment can get you close to the lowest rates, while others require as much as a 35% down payment.
