What is required to purchase a home?

Start With Your Down Payment

This is the amount of money you will contribute towards buying a home. The minimum down payment varies, depending on the purchase price.

For properties under $500,000, a minimum down payment of 5% is required to qualify for a mortgage. For properties over $500,000 but under $1,500,000, the minimum down payment is 5% of the first $500,000 in purchase price, plus 10% of the remainder purchase price above $500,000. For properties $1,500,000 and over, a minimum of 20% down payment is required.

Save More With 20% Down Payment

To minimize your monthly mortgage expenses and the total amount of interest will pay throughout the term, a down payment of 20% may be more suitable for you if feasible.

Mortgage default insurance is legally required if you contribute a down payment of less than 20%. The three default insurers in Canada are Canada Mortgage & Housing Corporation (CMHC), Sagen, and Canada Guaranty.

How to Save Money for Your Down Payment?

There are multiple options nowadays for a borrower to contribute towards their down payment and ultimately reduce the total mortgage needed.

First Time Home Buyer Programs

Take advantage of government-sponsored initiatives like the Home Buyers’ Plan (HBP), First-Home Savings Account (FHSA), and much more!

Savings & Investment Accounts

Save your money in a savings account that pays a high interest rate or invest in registered funds such as a Tax-Free Savings Account (TFSA).

Other Sources

Put monetary gifts from immediate family, tax refunds, work bonuses, etc. towards buying your dream home.

Take advantage of a 30 Year Amortization!

Up until recently, any buyer who was looking to purchase a property with less than 20% down payment and/or obtaining default insurance (CMHC, Sagen, Canada Guaranty) was limited to a 25 year amortization period.

With these new rule changes now in effect, anyone who is buying a pre-construction property (from the builder) can opt to obtain a 30 year amortization period. In addition, any eligible First Time Home Buyer can buy a resale property with a 30 year amortization period. While there is a slight increase in the default insurance premium that the borrower would amortize into their total loan amount, a 30 year amortization overall increases affordability, lowers the mortgage payment, and can make the difference in having options for your next home.

To determine if you are eligible for a 30 year amortization, please consult with us and refer back to the government’s websites in regards to the specific definitions of an eligible First Time Home Buyer.

What our customer says

“Henry and his team has always helped many of my clients and myself find creative financing where not the big 5 banks can. Their service is timely in addition to the great customer service they provide day in and day out. I would highly recommend any one who’s looking for any type of financial help to reach out to NXT!”

- Matthew Hua

1-833-NXT-3003

First Time Home Buyers