Mortgages Demystified

Conventional Mortgages

Conventional mortgages are available for up to 80% of the purchase price or appraised value of the property, whichever is lower. In other words, they require a minimum down payment of 20%.
For example, to qualify for a conventional mortgage on a $350,000 home, you need a down payment of at least $70,000.

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Low Downpayment Insured Mortgages

If you don't have a down payment of 20% most banks offer insured mortgages that require lower down payments than conventional mortgages, typically 5% or 10%. Keep in mind there is a premium for insurance to cover default of payment.

For example, insurance premiums range from 0.5% to 7%, depending on the size of your down payment.
To check premiums for CMHC and GE Mortgage Insurance see the Useful Links below.

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Downpayment: How & How Much?

When preparing to buy a new home, many homebuyers start by searching for their "dream home"...only to find that it's well beyond their grasp. The first thing to do - before you visit showhomes, before you shop for interest rates, and certainly before you start packing - is look at your savings.

How much you have available for your down payment and closing costs affects almost every aspect of your home purchase - including how you write your purchase offer, the loan programs you qualify for, and shopping for interest rates.

The down payment is the amount of money you can apply to the purchase price of your home before you arrange the mortgage. The minimum requirement can range from 5% to 20% of the purchase price, depending on whether you choose a low down payment insured mortgage or a conventional mortgage.
If you don’t have the required down payment available in cash, there are other options to acquire the funds.

The Federal Government will allow first time homebuyers to withdraw tax-free up to $25,000 from their RRSP to buy or build a home. Generally, for each year of your 15 year repayment period, you have to repay 1/15 of the total amount you withdrew, until the full amount is repaid to your RRSP’s. Payments start the second year following the year you made your withdrawal. If the annual amount is not paid back, it is treated as taxable income for that year.


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