Putting together your down payment 2015-09-24 11:12:15 Posted By Jila Rezai
The first step in paying for your home is putting up the down payment. At a minimum, you'll need to put down five per cent of the property's total purchase price, but the more, the better. The greater the percentage you put down, the lower your mortgage insurance premium will be - which makes maximizing your down payment a cost-saving solution over the long term.
One way to boost your down payment is by borrowing from your RRSPs. Through the federal government's current Home Buyers' Plan, first-time buyers (or those who have not owned a principal residence within the past five years) can withdraw up to $25,000 from their RRSPs toward their down payment, up to a maximum of $50,000 per couple, provided they repay the money to their RRSPs within 15 years.
Another option is to receive help from family. However, lenders will require a gift letter stating the money is non-repayable (proof that it's a true gift and not a loan), and gifted down payments can only come from an immediate family member.
Source: Mortgage Brokers Association of BC