How much down payment will you require?
From a low down payment mortgage to using your Registered Retirement Savings Plan (RRSP) as a source of funds, buying a home has never been easier.
The down payment is that portion of the purchase price you furnish yourself. The balance is obtained from a financial institution in the form of a mortgage. The amount of the down payment (which represents your financial stake, or the equity in your new home) should be determined well before you start house hunting.
Sources of down payment:
- Own savings
- Family Gift ( must be from an immediate family member only)
- RRSP ( maximum is $25,000 tax free)
- borrowed against other assets
What is the required down payment?
Require a minimum down payment of 5% of the purchase price for homes up to $500,000. For homes of more than $500,000, please check here.
Credit scores must be between 650 to 680.
Income needs to be fully qualified.
Self Employed borrowers with stated income need 10% down minimum.
Rental properties now require 20% down payment.
What if my credit is bad or Challenged?
Challenged credit borrowers or those that do not meet the new stress test will need a minimum of 20% down payment.
There are some instances where 15% might work in certain high profile urban markets like Toronto, Vancouver and Greater Areas.
Summary of Down payment Requirements
|CREDIT SCORES||Down payment||Remarks|
|600+||5% Minimum||* Assumes clean history last 24 months
** Must pass the new stress test for insured mortgages
|Below 500||25% or more|