The size of a down payment can vary. Depending on the type of mortgage, down payments generally range from 5% to 20% of the purchase price.
To obtain a conventional mortgage, home buyers are required to put down at least 20% of the purchase price or appraised value (whichever is less) as a down payment. If you don't have the necessary time or resources to save a full 20% down payment, you can choose a high-ratio mortgage and buy a home with a down payment of as little as 5%. This option is called a high-ratio mortgage and it requires you to purchase default insurance.
Whether you choose a conventional or a high-ratio mortgage, one thing is almost always certain: the larger your down payment, the more you save in the long run.
Want more information? Visit the Canada Customs and Revenue Agency Publication.
The RSP Home Buyers' Plan (HBP) lets a first-time buyer withdraw up to $25,000 from RSPs for a home purchase. The withdrawn amount must be repaid within 15 years, subject to a minimum annual repayment that is 1/15 of the amount withdrawn. If the full $25,000 is withdrawn, the minimum annual repayment is $1,333. If less than the minimum is repaid in any particular year, the balance is added to the taxpayer's income.
CMHC or Genworth Financial may insure a mortgage for up to 95% of the lending value of the house. Therefore, purchasers do not need a large down payment. Eligible borrowers include anyone who buys a home in Canada intending to occupy it as their principal residence. And the availability of government-backed mortgage insurance is restricted to homes with a value of $1 million or less
Purchasers can use up to 39% of their gross family income for payments of mortgage principal and interest, property taxes and heating. A buyer's total debt load (including consumer loans, etc.) cannot exceed 44% of the gross family income.
People who insure a mortgage loan with CMHC or Genworth pay a premium. The premium is based on the down payment and loan amount. A list of the mortgage insurance premiums can be found here.
Premiums can be paid up front or added to the principal amount of the mortgage.
Up to 95% of the lending value of the house.
To be set by the lending institution.
Max. House Price:
Varies by market.
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The information provided herein must only be used by consumers that have a bona fide interest in the purchase, sale or lease of real estate and may not be used for any commercial purpose or any other purpose.
Information is deemed reliable but is not guaranteed accurate by TREB.
Toronto Real Estate Board - IDX Last Updated: 7/27/2017 6:34:26 AM