At Lotus Loans & Mortgages Corp, we often receive questions about minimum down payments so we are proving helpful information based on the 3 most popular scenarios:
- The Standard 20% down payment is the minimum down payment to avoid the CMHC insurance premium and the 8% sales tax that goes with it. It is also a way to benefit from lower monthly payments because you can opt for a 30 year amortization since with less money down you are limited to a maximum 25 year amortization.
- Then there are down payments from 7.5%-19% where you can buy a property for less than $1M. Rates are actually lower on these CMHC deals vs non-CMHC deals but you have to pay the mortgage insurance premium. Maximum amortizations are 25 years.
- Last but not least, there is the lowest down payment option where you only need a 5% down payment so on a $500K condo let’s say, you only need $25K down. This does result in higher monthly payments and a mortgage insurance premium of 4% of the total mtg amount. And of course, you are limited to a 25 year amortization.
If you or someone you know someone who needs to understand how much they need to save for their dream home, contact us at Lotus Loans & Mortgages Corp, we’d love to help!