20% down conventional mortgage in Canada

Real Estate Agent with Remax Escarpment Realty Brokerage

The definition of a "conventional mortgage" has now changed in Canada, making the dream of home ownership more affordable.

Until now in Canadians needed to place a whopping 25% down payment on their homes to avoid having to buy mortgage insurance. A recent amendment to the Bank Act now allows borrowers to obtain conventional financing, free of the added expense of mortgage insurance, with a 20 percent down payment.

 This 5 percent drop is significant for the average home buyer. On $200,000 property, instead of having to come up with a down payment of $50,000, a buyer needs only $40,000 to avoid paying mortgage insurance. Canadian mortgages brokers are sure to applaud the change as well, because it gives them much more flexibility in financing loans of up to 80% of the purchase price. Mortgage insurance will still be needed for loans in excess of 80%, but far more loans will be able to avoid the stiffer guidelines:

1.75% of the amount borrowed on the mortgage of loan 80-85 % of purchase price

2.0% on 85-90% of purchase price

2.75% on 90-95% of purchase price

2.90% on 95% loans

3.1% on 100% or purchase price

Still mortgage insurance is still a better alternative the renting.

Contact me: domenic@domenicmanchisi.com

or goto www.haltonnomoneydown.com also more real estate info visit www.domenicmanchisi.com


Comments (0)