October 3, 2013 nkad3

Down Payment – How Much Do I Need?


It’s true, a first time home buyer can purchase a home with no more than a 5% down payment and 95% financing (high ratio mortgage with default insurance through CMHC). The main question is, are you an A client or a B client? Far too often, clients shop around for rates but neglect to consider the other factors that are important in finding a home. The first priority for a home buyer is to know whether they can secure a property with a sufficient down payment and enough available funds to cover the costs of closing. If you are NOT an A client (Bank qualified deal, good credit, good income), you will most likely require a larger down payment (up to 15%-20%) in order to secure the property as CMHC will not insure you under a high ratio mortgage, plus the cost of closing (legal, land transfer taxes, etc.)

As a shopper, it is important for you to understand your own financial situation. How is your credit? How is your income, and are you able to prove that you can support the mortgage you are requesting? If the bank has turned down your request, are you able to come up with a down payment larger than 5%? Do you have outstanding collections or debt that is significantly impacting you?

These are just some of the questions we encourage you to ask yourself when considering the purchase of your home. Just remember, there’s a solution out there for anyone looking to buy a home. If you would like to know what it would take for you to do so, just give us a call, and we’d be happy to help you understand your situation better.


(905) 455-5005

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