If you're buying a home do you ask what's the average or standard down payment in Canada? In this episode we discuss typical down payments for first time home buyers and those buying their second and beyond.
Hi everyone and welcome to another edition of Homebuyer's School. Today I'm joined by Troy Champ, he's a Mortgage Advisor with the Mortgage Tree.
Today the question that we're gonna answer is:
What's the standard, typical down payment for a house?
It really does vary depending on demographics and what area of the country you're in.
We're finding areas like Vancouver, Toronto that down payments higher, it's 20% or more. Areas like Calgary, there's a lot of first time buyers, so the down payment is much less. We're seeing the average around 10%.
Is there a difference between down payments for a new home and a resale?
No, the down payment requirement is the same, whether it's a new property or resale property. It's more based on the purchase price than the age of the property.
Does the type of home affect the average down payment? Whether it's a condo, a town home or a single family?
The down payment requirement is the same regardless. We do find that single family homes tend to have ... Are purchased by repeated buyers.
Karl Yeh: Okay.
That's not their first home. When they're already selling the property, buying a new property, they have more equity from the existing house, so the down payment's larger.
Are you saying that as, maybe along your lifespan, if you're buying more ... I mean, this is your second, third house, you probably are spending a little bit more on the down payment?
Correct. Yeah, so typically your first home is a condo or town house, your second home is a small move up, your third home is, what we consider more of an estate home.
By time you get to that stage, you have a larger down payment available to you.
Do you have an average that first time home buyers can afford?
Troy Champ: Most first time buyers are five percent down.
Karl Yeh: Five percent?
Troy Champ: Yeah.
Karl Yeh: Awesome. Well thank you very much Troy.
Karl Yeh: Thank you very much everyone for joining us and we'll catch you next time.
Let us know if you have additional homebuying questions that we can answer by submitting them in the comments section below.
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About Troy Champ:
Troy is one of those uniquely capable mortgage experts who has refined his craft over 17 years of experience with two of Canada’s major financial institutions and then one of the largest mortgage brokerage firms in Western Canada. He is amongst a rare group of professionals who have funded over $500 million in mortgages over his career and received many top level awards for excellence.
A hallmark of Troy’s service pledge is unparalleled availability. While many will say they provide great service, Troy proves it day in day out without question. His clients are never left waiting for answers to their enquiries. Quite simply, his clients are thrilled to work with someone who says what they do and does what they say.