If you have no down payment saved you can still get a mortgage and buy a home!
Payment Mortgages
If you have no down payment saved you can still get a mortgage and buy a home!
This calculator is for illistration purposes only. For more information contact us.
This is the estimated amount of home equity you will gain - or miss out on - during your down payment savings period. We used average inflation of 3% to calculate the home appreciation.
This is how long it will take you to save up the full 5% down payment or, on the flip side, the benefit of owning your own home years sooner even with no down payment.
For every $100,000 borrowed Canada Mortgage and Housing Corporation charges a slightly higher, one-time premium of $250 for the Flexible down payment mortgage.
This is the cost of the borrowed 5% down payment, as the bank and seller of the property will still require a deposit, this amount is calculated using a rough interest rate of 7% over five years.
Canada Mortgage and Housing Corporation, or CMHC, is a crown corporation that provides default mortgage insurance to banks and lenders. CMHC operates the Flex Down mortgage program which allows for non-traditional down payment sources. Under their program applicants must be permanent Canadian residents, have good credit, and not have a mortgage with CMHC insurance currently.
For more information download CMHC's flexible down payment program built for individuals with No Down Payment.
If you are looking to purchase a home and have no down payment but you have good income and good credit, then you can still purchase a home. Federal mortgage rules require a minimum down payment of 5%, however they do allow flexibility on the source of that down payment. Under the Flex down program you may borrow all or a portion of the down payment.
This is the reaction we often get from our client’s, and it’s understandable considering the confusion in the industry with regards to no down mortgage program. The cause of this confusion originates from the Government of Canada’s changes to mortgage regulation, specifically OSFIs B-20 and B-21 legislation. These changes no longer permit Cash Back no down mortgage programs - this is where the lender provides the 5% down payment as well and the mortgage but then recoups their cost through an inflated mortgage rate. When the Cash Back for down payment ended, so to did most of the banking industries participation in this market.
OSFI effectively cancelled the Cash Back mortgage but continued to allowed Flexible Down Payment programs, providing Canadian home buyers with an avenue to purchase a home even if they had no down payment saved.
While every one of our client’s situations is different there are some common obstacles to saving a down payment that we run into often. The first, and the one that encourages us to continue working with flexible down payment programs, is the future home owner who had saved up their down payment, but were forced to use it due to family emergency. We’ve encountered situations where an unexpected family medical expense drained a couple’s down payment savings and other situations where savings were withdrawn to help a family member purchase a home.
But unexpected expenses aside, it isn’t easy saving for a home, especially when the value of that home increases consistently. Many home buyers feel they just can't get ahead, and having no down payment just holds them at a disadvantage. Good news is: we have a solution!
