Greater Savings with a Larger Down Payment
The size of a down payment can vary. Depending on the type of mortgage, down payments generally range from 5% to 20% of the purchase price.

To obtain a conventional mortgage, home buyers are required to put down at least20% of the purchase price or appraised value (whichever is less) as a down payment. If you don't have the necessary time or resources to save a full 20% down payment, you can choose a high-ratio mortgage and buy a home with a down payment of as little as5%. This option is called a high-ratio mortgage and it requires you to purchase default insurance.

Whether you choose a conventional or a high-ratio mortgage, one thing is almost always certain: the larger your down payment, the more you save in the long run.

Want more information? Visit the Canada Customs and Revenue Agency Publication.

A larger down payment...

• Reduces the amount of your monthly principal and interest payment
• Reduces the total amount of interest you pay over the life of your mortgage

Insuring Your High-Ratio Mortgage
CMHC or Genworth Financial may insure a mortgage for up to 95% of the lending value of the house. Therefore, purchasers do not need a large down payment. Eligible borrowers include anyone who buys a home in Canada intending to occupy it as their principal residence. And the availability of government-backed mortgage insurance is restricted to homes with a value of $1 million or less

Purchasers can use up to 39% of their gross family income for payments of mortgage principal and interest, property taxes and heating. A buyer's total debt load (including consumer loans, etc.) cannot exceed 44% of the gross family income.

People who insure a mortgage loan with CMHC or Genworth pay a premium. The premium is based on the down payment and loan amount. A list of the mortgage insurance premiums can be found here.

Cost:
Premiums can be paid up front or added to the principal amount of the mortgage.

Loan Amount:
Up to 95% of the lending value of the house.

Mortgage Term:
To be set by the lending institution.

Max. House Price:
Varies by market.

Want more information? Visit the Canada Mortgage and Housing Corporation or Genworth Financial websites.