Home Buyers can also purchase their home with as little as 5% down. The 5% down program was initially set-up for qualified First Time Home Buyers but has since been made available to everyone even repeat buyers providing they meet the program criteria.
All mortgages that are above 80% of the purchase price must be insured with mortgage insurance under The Bank Act (CMHC or GE Capital insurance). The premium for having a downpayment that is between 5% and less than 10% is only 2.9% of the purchase price (reduced from 3.25% earlier in 2005). All of the above programs have credit score and debt servicing requirements that are carefully reviewed. In some cases, there are programs that allow for a 95% mortgage and the balance of the downpayment borrowed from another source. This has a slighly higher premium and is only available in certain cases.
Please note that this insurance premium can be added to the mortgage.
This program has arguably been the most successful program leading to making home ownership easier and enabling this goal to be attained earlier than most people could have otherwise. Recently the maximum purchase price has also recently become unlimited for those who have 5% down or more from their own resources. Contact us for the amount in your area.
For more information on CMHC / GE and other mortgage types please click here.