You have decided to purchase a home in Canada and are looking at different options? That's great news! So how do you decide what you can afford? The price of the home that fits your budget depends not only on your income, credit score etc., but also on the mortgage downpayment. That is, how much money you have to put down for the home.
There are 3 main things you need to know about mortgage downpayment:
1. There is a requirement that you need to have at least 5% downpayment if the cost of the property is under $500k. Then you need another 10% for any amount from $500k to $999k (so 5% on the first $500k and 10% on the rest). And finally, if your property is $1M or more, you need 20% downpayment.
2. Downpayment amount depends on whether you are buying a home to live in, or as an investment. As a general rule, for investment properties you need 20% downpayment. But talk to your mortgage professional about your specific situation.
3. As a general rule, downpayment cannot be borrowed. So it usually comes either from your savings or from a gift (from parents for example). There might be some exceptions here, but you need to talk to your Mortgage Agent to see if they apply to you.
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