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How much does a first time home buyer have to save for a down payment?

“Always pick your yard based on your Summer lifetstyle.”


December 18, 2017 - Karl Yeh

So what's the specific down payment requirement you need when buying a house, especially as a first time home buyer? In this episode, we discuss what the down payment is for first time home buyers, requirements for any home buyer as well as secondary purchases and how equity from a previous home affects your down payment. 

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What we discussed:

Hi there, and welcome to another edition of Homebuyer's School. 

Today I'm joined by  Troy Champ, a Mortgage Advisor with Mortgage Tree, and today the question that we're going to answer is:

How much down payment for a house for a first time home buyer?

Karl Yeh:

Is there an actual specific down payment amount for a first time home buyer?

Troy Champ:     

Yeah, the minimum down payment is 5% on the first 500,000, 10%  any amount over 500,000 up to a million dollars.

Then if you hit a million dollars, then a minimum down payment becomes 20% or sometimes even larger depending on the bank.

You don't have to be a first time buyer to put 5% down though, so you can be buying your second home, third home and still have a 5% down payment.

If this is your second, third, fourth or however many homes your down payment is probably a little bit higher?

Troy Champ:     

As long as you're selling the previous home, absolutely.

If you're selling the previous home, taking that equity into the [00:01:00] new property, then your down payment amount usually increases.

But what some people do is purchase one home, turn that into a rental property, buy a secondary home with just the 5% down.       

Is there a difference for a first time home buyer as whether it's new or resale, still 5%?

Troy Champ:     

No, there's no difference at all for the requirements for the new or resale.

Karl Yeh:             

Are you finding first time home buyers, let's say, differ in terms of down payment for a town home, single family?

Troy Champ:     

Well, we find first time buyers [00:01:30] tend to buy a lower price point home so that's the town homes, condos. From there, they're selling those properties moving into single family home.

They have some equity built up already to the next home. Then from there, they're selling the single family home moving into more of an estate home.


Karl Yeh:              Great. Do you have anything else to add?

Troy Champ:     

Just the one requirement.

If you're buying a secondary property with 5% down, you are able to do that. CMHC will only insure one property for you, but there's two other insurers in the country that will insure a secondary property [00:02:00] for you. (Genworth and Canada Guaranty are the other two.)

Karl Yeh:              That's Calgary Mortgage Housing Corporation?

Troy Champ:      Canadian Mortgage Housing Corporation.

Karl Yeh:              Okay. Awesome. Well, thank you very much.

Troy Champ:      My pleasure.

Karl Yeh:             Thank you very much for joining us, and we'll catch you next time.


Your turn:

Let us know if you have additional homebuying questions that we can answer by submitting them in the comments section below. 

Homebuyer's School publishes new content weekly so subscribe or check back regularly for the latest information, strategies and tips from homebuying experts. 

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.

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