Dowpayment Options

Conventional Mortgages

Conventional Mortgages require a minimum downpayment of 20%, and you can choose either a fixed or variable interest rate and any term and amortization. Conventional Mortgages typically cost less to arrange because they do not require mortgage default insurance through CMHC or Genworth. A full appraisal may be required.

Insured Mortgage (Downpayment less than 20%)

Canadian law only allows banks to mortgage a property up to 80% loan to value. When you want to borrow more than this amount (‘high ratio') the mortgage must be insured against default through either CMHC or Genworth Capital. This is insurance that insures the lender against you defaulting on your mortgage payment; it does not insure you and is not to be confused with Mortgage Life Insurance. The costs for a high ratio mortgage are higher because they include this premium. The premium is also added into your mortgage so it's not a direct out of pocket expense; however the PST on the insurance premium has to be paid on closing.

Using your RRSP's for a downpayment

The Federal Governments Home Buyers Plan (HBP) allows first time homebuyers to use up to $25,000 from their RRSP's ($50,000 for couples) for a downpayment on their home. These withdrawals are not taxable as long as they are paid back over a 15 year period. Contact Us to learn more about this program and to see if you qualify.

No Down Payment Mortgage (or 'Free' Down Payment Mortgage)

While the Zero Down program is no longer offered, there is still the option to get a Free Downpayment Mortgage if you have good credit & income, but haven't been able to save up the necessary downpayment to purchase a home. The way this program works is the lender loans you the 5% downpayment, and you pay it back to them over the term of the mortgage in the form of a higher interest rate, usually the banks posted 5 year rate. You just have to show proof that you've saved enough to cover the closing costs, typically 1.5% of the mortgage amount.

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