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22 Feb

MINIMUM DOWN PAYMENTS

General

Posted by: Michelle Zimmerman

Are you looking for that new dream home, or anything that will get you out of your current rental property so you can officially become a homeowner?

If so, what is the minimum amount you are required to put down?

Below are three different purchase price categories. Each one has their own minimum down payment requirements and we have included some important notes to also consider at those prices.

| $1-$500,000 | Minimum 5% Down Payment |

  • The lowest amount you need as a cash down payment for a purchase up to $500,000 is only 5% of the purchase price.
  • For a $300,000 home, this would be $15,000.

| $500,001 – $999,999 | Blended Down Payment |

  • The minimum down payment if your purchase price falls in this category is 5% on the first $500,000 and 10% on the remainder up to a million dollars.
  • For a $650,000 purchase price, you would be required to put down $25,000 (5% on amount up to $500,000) and $15,000 (10% of the amount above $500,000 [$150,000 in this case]) for a total minimum down payment of $40,000. This would be a 6.15% down payment.

| $1,000,000 + | Sliding Scale |

  • 20% requirement on entire amount up to $1,250,000 and 50% down payment on amount over $1,250,000 subject to a 75% loan to value.
  • A $1,100,000 purchase price would be a minimum down payment of $220,000 (20%).
  • $1,350,000 purchase price would require $250,000 (20% on $1,250,000) plus an additional $50,000 (50% of amount above $1,250,000 [$100,000 in this case]).
  • Some lenders may make different exceptions depending on the strength of an application but, for the most part, the sliding scale information above is quite accurate.

There you have it! The three most common sized purchase prices and their required minimum down payment. Please keep in mind that almost all lenders will require you to have an additional 1.5% of the property value available in cash to cover all closing costs which may include, for example, lawyer fees, property transfer tax, and insurance. If you have any questions, contact a Dominion Lending Centres mortgage professional near you.

Great information provided by Ryan Oake of DLC Producers West Financial based in Langley, BC.  Thanks Ryan!