CMHC Mortgage - Buying with 5% Down Payment
By ebizniz on October 25, 2007 - 4:57pm
Home buyers can buy with 5% down payment if they are qualified for CMHC high ratio mortgages. If you are a first time home buyer, check out if you are qualified to withdraw your RRSP savings as down payment under the "home buyer's plan". In addition, find out if you are exempted from paying the British Columbia "property transfer tax".
When you are buying a home with less than 20% down payment, your mortgage is a high ratio mortgage. You are required to buy a home mortgage insurance to protect your mortgage lender against loan default. The insurance premium charged is dependent how much down payment is provided by you. The insurance premium may range from 1.00% to 2.75% of your mortgage amount.
Please refer to CMHC mortgage insurance premium table for details. If you plan to buy a home with 5% down payment and get a high ratio mortgage, check with your local mortgage broker whether you can be approved for mortgage financing. The 5% down payment can come from different sources such as lender’s cash back incentives, lines of credit/credit cards, arm's length personal loans or gifted down payment.
