Owner-Occupied Homes
Minimums: The federal government, through the mortgage insurers, sets the minimum for downpayments. For a house that is owner-occupied (Ie. the person buying it will live in it) the rules are as follows:
5% down for the first $500,000.00. For example, a $400,000.00 home would require $20,000.00 downpayment.
10% down for any additional amount over $500K, but less than $1,000,000.00. For example, a $700,000.00 home would require 5% downpayment of the first $500K, so $25K plus 10% of the amount over $500K ($200K). This would equal a minimum downpayment of $45,000.00
Any downpayment under 20% is subject to an insurance premium (most people know this as the CMHC fee). The premiums get added on to the mortgage and aren’t something the buyer pays cash for.
20% is the minimum downpayment needed to not go through the mortgage insurers. This downpayment also allows for extended amortization of 30 years in some cases (this brings down monthly payment but increases overall interest costs).
Rental Properties
The minimum down payment for rental properties is 20%. Multiple banks have started asking for 25% down on rental condominiums in some areas.
Second Homes
(Think: Vacation property, a house for grandma, a condo for your kid to use while they are in university etc.) Minimum downpayment for a second home is the same as owner occupied homes. So someone could buy a second home with as little as 5% down!
Learn more by contacting our mortgage team, or apply now using our no-obligation application form to see where you stand.