Had a friend moving back from the US. I have no clue as I stopped shopping for properties 10 years ago. He wanted to put the minimum downpayment for a townhouse. I suggested to get a freehold so that there won't be any maintenance but no kids and the couple are working. so they just want a townhouse for now.
How much is the minimum downpayment for a house right now in terms of %?
- Thread starter richaceg
- Start date
BoC is changing the guidlines almost semi annually...depending on the BoC rate....they are worried people will over extend themselves...if he can go 25%..save on the mortgage insurance ....make sure he shops around...there are some good rates right now
don't understand these childless couples needing to own an expensive property with a huge mortgage. If you are working, just get a bachelor or 1-br apartment, save money before buying a house when baby comes.
With rates in the 3 % range...get in as soon as they have enough.
Yes you might pay mortgage Insurance, but at the low rate, it will be peanuts per month..and for that price you get into your place quicker and allow it to accrue having peace of mind and satisfaction you are in YOUR OWN HOME
Waiting to get to 25% can take some folks years.....lost time in appreciation....when for a few thou..they could have mortgaged the added insurance premium at 3%.
Yes you might pay mortgage Insurance, but at the low rate, it will be peanuts per month..and for that price you get into your place quicker and allow it to accrue having peace of mind and satisfaction you are in YOUR OWN HOME
Waiting to get to 25% can take some folks years.....lost time in appreciation....when for a few thou..they could have mortgaged the added insurance premium at 3%.
As far as I know:
At just under 10% to the minimum 5% down payment the CMHC or Genworth mortgage insurance premium is 2.75% of the mortgage amount. That premium is one-time, and can be added to the total mortgage loan and amortized.
From just under 15% to a 10% down payment the premium is 2%.
From just under 20% to a 15% down payment the premium is 1.75%.
Remember, this kind of mortgage insurance protects only the lender if you default on your mortgage. You get nothing from this insurance in case of default. If you want to be protected yourself get separate life and disability mortgage insurance. (And even that won't protect you in case of an ordinary default.)
Also keep in mind that the percentages involved are based on the appraised value of the property, which is not always as high as the purchase price. A low appraisal can cause problems as it can significantly reduce the total amount of the mortgage loan that will be approved for a property.
Another point: the maximum amortization period for a "high-ratio insured" (less than 20% down) mortgage is 25 years.
My advice: Talk to a licensed Ontario Mortgage Agent or Broker, who will generally be more than happy to give you lots of free advice about the many variables involved in mortgage financing.
And it's true: fixed mortgage rates have never been lower!
As mentioned in The Star business section today, with the negligible spread between the best variable mortgage interest rates and the best fixed 5 year term closed rates today, hardly anybody is choosing to go with variable rates. One uptick in the Prime Rate and and the variable rate advantage will be lost. (That is, unless you believe that interest rates in Canada will fall even farther in the next 5 years.)
At just under 10% to the minimum 5% down payment the CMHC or Genworth mortgage insurance premium is 2.75% of the mortgage amount. That premium is one-time, and can be added to the total mortgage loan and amortized.
From just under 15% to a 10% down payment the premium is 2%.
From just under 20% to a 15% down payment the premium is 1.75%.
Remember, this kind of mortgage insurance protects only the lender if you default on your mortgage. You get nothing from this insurance in case of default. If you want to be protected yourself get separate life and disability mortgage insurance. (And even that won't protect you in case of an ordinary default.)
Also keep in mind that the percentages involved are based on the appraised value of the property, which is not always as high as the purchase price. A low appraisal can cause problems as it can significantly reduce the total amount of the mortgage loan that will be approved for a property.
Another point: the maximum amortization period for a "high-ratio insured" (less than 20% down) mortgage is 25 years.
My advice: Talk to a licensed Ontario Mortgage Agent or Broker, who will generally be more than happy to give you lots of free advice about the many variables involved in mortgage financing.
And it's true: fixed mortgage rates have never been lower!
As mentioned in The Star business section today, with the negligible spread between the best variable mortgage interest rates and the best fixed 5 year term closed rates today, hardly anybody is choosing to go with variable rates. One uptick in the Prime Rate and and the variable rate advantage will be lost. (That is, unless you believe that interest rates in Canada will fall even farther in the next 5 years.)
You are probably correct. I got mine 15 years ago and it was 25%. I just assumed that with the economy recently that it would have remained the same and not dropped to 20%.
OK I'll make my answer shorter this time.
Currently, the minimum down payment for a conventional non-insured mortgage is 20% of the purchase price or the appraised value of the property (whichever is lower, and the lender specifies which appraiser you can use). Of course, if the appraisal is lower than the purchase price you need to pay that difference up front, along with the down payment @ 20% of the appraised value.
The minimum down payment for a high-ratio insured mortgage is 5% of that same value.
Currently, the minimum down payment for a conventional non-insured mortgage is 20% of the purchase price or the appraised value of the property (whichever is lower, and the lender specifies which appraiser you can use). Of course, if the appraisal is lower than the purchase price you need to pay that difference up front, along with the down payment @ 20% of the appraised value.
The minimum down payment for a high-ratio insured mortgage is 5% of that same value.
