A frequently asked question is what is a minimum down payment in Canada?  The answer is 5%. The down payment has to come from your own resources. All or a portion of it can be gifted.

Now sometimes the extension of this question is, well what do I have to put down in order to avoid any type of additional default insurance premium? The answer to that is 20%.

For more information about default insurance premiums, see one of the other videos in our series on Loan To Value or What Is CMHC.

Let’s talk about zero down payment options because this is a really common thing that I think people ask a lot about and there is a lot of misconception out there. Particularly people, I think, need to understand that zero down payment options are reasonably limited now in Canada. They come with a lot more restrictions. Particularly pre-payment restrictions, claw backs, which means if you ever pay the mortgage out early you have to pay back the amount of the down payment that has been gifted to you by the bank or you have to pay a higher percentage rate. So programs are called free down payment or zero down payment, the biggest thing I think people need to understand is that there is an additional cost in higher interest rates. So really you’re financing the amount of your down payment.

Now that may work for you and to find out more information about that please contact one of our mortgage planers at Canada Mortgage Direct.

Thanks for watching.

If you would like more information on this or other mortgage related topics contact Canada Mortgage Direct in one of the following ways:

Visit our website at CanadaMorgageDirect.com.

You can phone our office: 403-250-2100

Or you can email us at Save@CanadaMortgageDirect.com

We would also like to invite you  to the Canadian Home Buyers Academy and you can visit us there at the CanadianHomeBuyersAcademy.com

Thanks again!