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High Ratio & RRSP Mortgage         

When buying a home under a conventional mortgage you will be required to pay a minimum of 20 % of the purchase price as a down payment. People who are unable to come up with this much cash at a moment’s notice shouldn’t feel dishearten.

The Canada Mortgage and Housing Corporation (CMHC) as well as other private companies offer insurance on a high ratio mortgage that provides 95% financing to the buyer. With this mortgage plan, you pay only 5% down to purchase your home.

However, you should also know that to take advantage of this program you will have to pay an insurance fee from 1.00% to 3.40 % of the mortgage as well as an application fee. The insurance fee provides confidence to mortgage lenders that they will be paid back by the insurer (CMHC) if you default on your mortgage

Another option to consider is the RRSP Home Buyers Plan. This program allows buyers to withdraw up to $20,000 from their RRSP to buy or build a home. The advantage of this plan is that you don't have to pay tax or interest on the money you withdraw. Some of the criteria that must be met include:

  • You must be a resident of Canada and this home must be your principal residence;
  • The money must be in your RRSP for at least 90 days;
  • You and your spouse must not have owned a home within the past 5 years, together or individually;
  • You are required to pay the loan back to your RRSP in minimum annual installments over 15 years, starting the second year after you withdraw the money.

Call  John MK Lam now at 604-671-1818                                                                

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