Determine What You Can Afford

Determining the type of home that you can afford to purchase involves figuring out how much money you have for your down payment plus the typical one-time expenses of buying a home, and how much a mortgage lender will lend to you.

Legally-regulated lenders require that the down payment be at least 5% of the purchase price of the property, up to a price of $500,000, then 10% for any amount above $500,000, then 20% for any amount above $1,000,000.

Note that if your total down payment is less than 20% of the purchase price, then you will probably be required to purchase mortgage loan insurance. The insurance premium will be rolled into your regular mortgage payments, so there is no up-front cash requirement for this premium.

To find out how much a mortgage lender will lend to you, speak with a mortgage representative about a mortgage pre-approval, either directly through a lender (such as a bank or credit union), or through a mortgage broker, who will shop around for the best mortgage for you.

Miia can recommend a mortgage representative to you. For recommendations to mortgage representatives, call or text Miia at 416-725-3544, or email miiakelly@royallepage.ca.

 


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