My Down Payment
Ideally, your down payment should be 20% of the purchase price of the property you'd like to buy.
Print out the worksheet to complete the following table by hand.
| Descriptions | Amount | |
|---|---|---|
| 1. |
Savings
RRSPs Cash donations (from a relative, friend, etc.) Value of the property you want to build on if you already own it Work that you'll do yourself |
+ $___________
+ $___________ |
| 2. | Down payment total | = $___________ |
| 3. | Divide the total of your down payment by the value of your future home. | = __________% |
If I Don't Have a 20% Down Payment
Not everyone has 20% of the property value in cash. You can still make your dream come true with a down payment of 10%, 5%, or less, as long as your mortgage is insured with the Canada Mortgage and Housing Corporation (CMHC) or Sagen. A premium (calculated on the basis of your down payment and the amount of your mortgage) is then added to your loan amount. Under certain conditions, the down payment can also come from various other sources, such as a loan. It’s a golden opportunity for first-time buyers!
Increasing My Down Payment
To increase your down payment and lower your mortgage, take advantage of the Home Buyer's Plan (HBP). This program lets you withdraw up to $35,000 ($70,000 for a couple) tax-free from your RRSP to put towards your first home. The only condition: each year, you must repay at least 1/15th of the amount taken out of your RRSP, within 15 years.
Example:
$35,000 ÷ 15 = $2,333 the 1st year
$32,667 ÷ 14 = $2,333 the 2nd year
$30,334 ÷ 13 = $2,333 the 3rd year, etc.
No RRSP, or an RRSP With Less Than $35,000 In It?
You can access the HBP program by taking out an RRSP loan with us.
- Borrow the necessary amount from Laurentian Bank, taking into account your needs and your unused RRSP contributions.
- Invest the borrowed amount into a Laurentian Bank RRSP.
- After 90 days, you can withdraw the RRSP amount and use it to pay back your loan.
- Then use your income tax refund to help cover costs related to buying your new home, such as the down payment, notary fees, etc.
- Pay back at least 1/15th of the sum used every year for a maximum of 15 years.
If you have any questions, contact one of our advisors right away at 514-252-1846 or 1-800-252-1846.
Don’t Forget! Start-Up Costs Are Always Due From the Start!
You have determined your down payment and loan amount, but have you set a little aside for start-up costs? On average, these amount to $5,000, i.e., 3% to 5% of the property value.
We have put together a start-up costs calculation table to help you do your accounting. You can also print it out and complete it by hand.
My Mortgage Payment
Have you determined the highest property value you can afford? Are your ratios acceptable and do you know how much you are putting down?
Use our Mortgage Loan Calculator to find out the amount of your mortgage payments, or multiply the amount of your mortgage loan by the coefficient corresponding to the interest rate in effect and the number of years you expect it will take you to repay this loan (the amortization period).
My Pre-Approved Mortgage
OK, you've calculated everything? If you haven't already done so, complete a mortgage pre-approval application. You are under no obligation; it will simply let you know exactly how much you can borrow from us to put towards the purchase of your next home.
To apply for your pre-approved mortgage, simply complete our online form or consult an advisor at one of our branches.
Already done? You are finally ready to start looking for your first home!
Draw up the list of selection criteria for your new home >>>
