Mortgage Down Payments: Let’s Clear Up the Confusion
Mortgage Down payments
It seems as though there might some confusion when it comes to mortgage down payments in Canada.
That’s why we’re here, to help clear things up for you in a easy and concise manner. So here’s the low down on mortgage down payments, what percentage you need to have, and for what kind of property.
5% Is All You Need For a Principal Residence
If you’re purchasing a principal residence all you really need is a 5% mortgage down payment.
Your principal residence is where you spend most of your livable time. It doesn’t really matter what it is, a trailer, townhome, or houseboat, if you live there or plan to live there that’s your principal residence. It is important to note that.
First time home buyers and those who are working on their second or third are all afforded this same luxury. So if the home you are looking to purchase is $500,000 you will need to put down at least $25,000 to be able to get a mortgage.
There are also some other things to consider when looking at purchasing a home.
When Do I Need to Come Up With More Than a 5% Down Payment?
The only time that you will need to legally come up with more than 5% down payment for a new home is if you’re purchasing one for investment purposes.
It’s not a bad way to invest your money, as it holds certain tax benefits, but you’ll need to have at least 20% of the mortgage to qualify for a mortgage.
If you’re looking for a principal residence a 5% of the purchase price down payment is all you need to get yourself the home of your dreams.
If you’re looking to get into the property or rental game you’ll need to cough up that 20% to find yourself a mortgage.