Joel DyckReal Broker SK Ltd.
Saskatoon · From the topic map

Can I really buy my first home with a small down payment?

Yes. The federal minimum down payment is 5 percent on the first $500,000 of the purchase price and 10 percent on any amount above that, and a First Home Savings Account or a Home Buyers' Plan withdrawal of up to $60,000 from an RRSP can supply that cash without new savings.

The tradeoff is mortgage default insurance. Anyone putting down less than 20 percent pays a premium through CMHC, Sagen or Canada Guaranty, added to the loan, and Saskatchewan charges provincial sales tax on that premium in cash at possession, which is a cost first-time buyers commonly forget to budget for.

A smaller down payment also means a larger mortgage and higher monthly payments for the same purchase price, so a buyer should weigh the insurance premium and the higher payment against how much longer it would take to save an additional 15 percent.

At the Saskatoon benchmark of $444,700, the minimum 5 percent down is reachable for many first-time buyers well before they might expect. Get your hand-reviewed valuation from Joel Dyck.

Get your hand-reviewed valuation from Joel Dyck.

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