Buy a home with 5% down ?

The 5% down payment used for be for first-time home buyers only. CMHC found the program to be so successful that now they offered it to everyone.

CMHC will insure mortgages of up to 95% of the home’s purchase price or the market value of the property, whichever is less. (Restrictions may apply up to a maximum purchase price of $175,000, Contact your local lender )

Conventional or High-Ratio

A conventional mortgage is a loan for no more than 75% of the appraised value or purchase price of the property, whichever is less. The remaining amount required for a purchase (25%) comes from your resources and is referred to as the down payment. If you have to borrow more than 75% of the money you need, you’ll be applying for what is called a “High-Ratio Mortgage”.

Here’s how it works:

You must have at lease a 5% down payment when you buy a home. Any down payment between 5% and 24% is considered a high-ratio mortgage, and the mortgage must be insured by the Canada Mortgage and Housing Corporation (CMHC) or GE Capital Mortgage Insurance Company (GEMICO). The insurer will charge a fee for this insurance. The amount of the fee will depend on the amount you are borrowing and the percentage of your own down payment. Typical fees range from 0.5% to 3.75% of the principal amount of your mortgage. This amount can be paid up front or added to the principal portion of your Mortgage.