How much Down Payment should I make?
Normally a minimum cash down payment from your own resources is required because mortgage lenders won’t advance the entire purchase price of a property. Your minimum down payment would normally be 5% to 10%, however, a recent change in regulations lowered the minimum to 0% for qualified first time buyers. Another program in Canada allows first time home buyers to use funds from RRSP for down payment.
It’s to your advantage to aim for a down payment of 20% or more, so you’ll qualify for a conventional mortgage and avoid paying the mortgage insurance premium. The larger your down payment, the easier it will be to arrange a mortgage and carry it comfortably. The smaller your loan, the lower your interest expense will be, and the more equity you will have in your home. Equity is equal to the value of your home minus the amount of your mortgage.