What minimum down payment is needed to buy a home?
Until recently, a minimum down payment of 5% from non-borrowed funds was required to purchase a home. But now, for applicants with excellent credit scores, this 5% downpayment may also be financed (subject to CMHC approval and increased premium rate). In addition to the down payment, you must also be able to show that you can cover the applicable closing costs being 1.5% of the purchase price (i.e. legal fees and disbursements, appraisal fees and a survey certificate, where applicable). By means of a personal line-of-credit or other credit facility which will be considered as part of the applicant’s total monthly obligations, an applicant may now borrow either one or both of the down payment and closing cost monies. Alternatively, these monies may be donated as a non-repayable gift to the applicant by a close relative.
