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New Rules from CMHC
The Canadian Mortgage and Housing Corporation recently
changed the rules around down payments to allow the funds to
come from any source, including a bank loan, credit cards,
family, and other sources.
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Zero Down Mortgages
Many banks and mortgage brokers offer zero-down or 5%
cash back mortgages.
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Save
Look for ways to reduce your monthly expenditures to save
toward a down-payment. You could enroll for an automatic
savings plan at your bank to have a portion of your payroll
automatically transferred into savings. Most people save a
couple of years for their down payment.
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Borrow the down payment from your
retirement plan
Check the provisions of your retirement plan. You can borrow
funds from your RRSP for a down payment. Be sure you
understand the tax consequences, repayment terms and/or
possible early withdrawal penalties.
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Move
You may be able to save additional funds if you can move
into less expensive housing.
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Reduce other higher interest rate
debt
Paying off credit cards will initially reduce your savings,
but the money you will save from higher interest rates will
pay-off in the long run.
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Make a deal with the seller
In some circumstances, it is appropriate to ask the seller
to carry a second-mortgage to cover your down payment.
Typically, you will pay a slightly higher rate for this
second mortgage.
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Sell some investments
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Get a second job and save your
earnings
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Skip a year's vacation
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Gift from Family
Parents and other family members are often anxious to help
children buy their first home and may have the means to give
you a gift of money for a portion or all of your down
payment.
