5% Down not just for First Time Buyers
Canadian Mortgage Default Insurance
Buying a house but don't have a 20% down payment? This is a lot of money and is not always a viable option for many Canadians. Luckily there is something called Canadian Mortgage Default Insurance which allows you to put less than 20% down. The minimum down payment required under this Insurance is 5%. The big myth is that this is only available for First Time Home Buyers. But on approved credit this is available to most!
When you get a mortgage that carries this insurance, your lender pays a premium. That coverage makes sure your lender is insured if you default on your mortgage payments. Lenders then pass these costs on to you; instead of paying more money upfront to purchase your home, you pay an extra monthly fee on your mortgage payments. How much extra depends on the value of your home and how much of a down payment you’re making: the less money down, the more money you’ll likely pay each month.
As of Feb 15, 2016 The minimum down payment will be 5% of anything under $500,00 and 10% of anything over $500,000.