Can I Get a Mortgage with No Down Payment?
The short answer – No.
But that’s not to say all hope is lost if you don’t have the down payment you need for the home you want. There’s no such thing as a no down payment mortgage in Canada anymore and it’s been that way since 2012. However there’s a different way to help you get that 5% down payment needed for your mortgage and the home of your dreams.
Let’s say that home you have your eye on is on the market for $400,000. That would mean you’d have to come up with at least $20,000 for the down payment on your mortgage. The more you put down on your mortgage, the less you’ll have to borrow and the less you’ll have to pay interest on. Even if you put $200 away every month that would take you over 8 years to save your down payment. Some might have that kind of time but I would go as far and venture a guess that most don’t.
Saving enough money for a downpayment of 5% can be difficult, particularly for young people that have recently entered the work force or have started a new family. If you want to buy a home but don’t have the full downpayment or none at all – there’s an option
The Flex Down program allows you to borrow all or part of your down payment with either a personal loan, line of credit, or sometimes even a credit card. Based upon qualifications, you are essentially borrowing your downpayment.
The down payment loan is separate from your mortgage and must be paid back to the financial institution as such. As you save up you can payoff the 5% loan or line of credit.
Flex Down allows you to purchase a home before having a down payment saved. You can build equity while you’re saving and paying off the line of creditor loan used for you down-payment. In one years time the equity built far exceeds the cost of the line of credit interest which makes this a great options for home buyers.
If you’d like to find out more about flex down programs or how a mortgage broker can help you get the best deal, please feel free to drop us a line.