Down payment:
It is the amount you pay before buying a property in Canada. This amount is a part of the price of the property that must be paid before signing the contract. In Canada, the minimum down payment is between 5% to 20% of the total sales price, which varies based on the price of the property.
Minimum down payment:
Normally, you need at least 5% down payment for the purchase of a property, but for more precise information, you should refer to a mortgage broker or an advisor from a financial institution.
Ways to secure a down payment to buy a property in Canada
- Savings
It can be said that one of the easiest ways to provide a down payment for a property is savings. If done correctly, it will save a lot of money over time. If buying a property is your most important priority, be sure to eliminate your unnecessary expenses with a basic planning so that you can collect more money.
- Stock market
If you like to take risks, go public. Maybe you will get a big profit by buying and selling stocks. If you are an expert in this work, the profit you will get from investing in the stock market is surely much higher than the profit you get from bank accounts with an interest rate of almost 8%.
- Loan
Getting a loan is one of the best ways to get a down payment for a home in Canada. You may be wondering how to use a loan to provide a down payment. This option is only available to those who have not yet purchased a home in Canada.
Important tips for obtaining a down payment for the purchase of property in Canada
- Pay off your credit card debt first
If you already pay a lot of interest to financial institutions, you won’t be able to save more. It is therefore preferable to settle your debts. First, see which of your credit cards has low debt but high interest. Pay that credit card. As a result, you will have more monthly payments. Now you can use that amount more and settle your next debt faster.
Very important tip: sometimes it’s better to use your credit cards and not pay off your debt completely. Because not using credit cards will lower your credit score and the bank may refuse to give you a loan. This point is very important for newcomers who are not yet familiar with the Canadian credit scoring system.
- Sell one of your cars
If you and your spouse have two cars, sell one. This will save you thousands of dollars every year. Because you can save the amount you spent on insurance, fuel, repairs and maintenance. Obviously, this remains a proposal to reduce costs before acquiring your first property in Canada and it depends on the use you have of your vehicle. So, to discuss with your family members.
- Withdrawal from a retirement account (RRSP)
Withdrawing money from a retirement account is another way to secure a down payment on a home in Canada. If you have a retirement account, you can withdraw up to $25,000 when you buy your first home.
- live cheaper
The lifestyle of some smart and wealthy people is such that they find cheaper yet fun ways to do various activities. It’s up to you to see which lifestyle and expense will suit you the most.
