If you’re looking for a trusted, experienced, and knowledgeable Regina mortgage broker to help a first-time home buyer, I am here to help. No matter what stage you are in the mortgage process, I can assist you in securing financing to get the home of your dreams. I also understand that all those mortgage rules and regulations surrounding the process can be confusing. My team and I are here to answer all your mortgage questions and take you to home ownership. In my latest tip, I share the information on buying a home with 5% down when you’re not a first-time home buyer.

Can I Buy a Home with 5% Down If I’m Not a First-Time Home Buyer?

Yes, you can! In Canada, you don’t have to be a first-time homebuyer to qualify for a 5% down payment on a home purchase. However, there are specific conditions and considerations to keep in mind. Let’s break it down.

Understanding the 5% Down Payment Rule

Under Canada’s mortgage rules, a 5% down payment is the minimum required for purchasing a home under $500,000. For homes priced between $500,000 and $1,499,000, you’ll need to pay 5% on the first $500,000 and 10% on the remaining balance. Homes priced $1,500,000 and over require a minimum of 20% down.

This minimum down payment rule applies regardless of whether you’re a first-time buyer or purchasing your second or subsequent property. However, it’s important to note that this lower down payment is only available for owner-occupied and second home properties, not for rental or investment properties.

Key Requirements for the 5% Down Payment

To qualify for the 5% down payment as a non-first-time buyer, you’ll need to meet the following criteria:
1. Owner-Occupied Property: The home you’re purchasing must be your primary residence or second home.
2. Mortgage Default Insurance: If you’re putting down less than 20%, your mortgage must be insured through the Canada Mortgage and Housing Corporation (CMHC), Sagen, or Canada Guaranty. Mortgage default insurance protects lenders and adds the insurance premium to your mortgage balance.
3. Good Credit and Income Stability: Lenders will assess your credit score and debt-to-income ratio to ensure you can afford the mortgage payments.

Benefits of a 5% Down Payment

Lower Upfront Cost: This allows you to enter the housing market sooner, even if you haven’t saved a large down payment.
Building Equity: Once you own the home, your mortgage payments contribute to your equity rather than paying rent.

Things to Keep in Mind

• Mortgage Default Insurance Premiums: With less than 20% down, you’ll pay an insurance premium, which is added to your mortgage amount. Premiums are dependent on the down payment percentage and amortization.
• Property Suitability: The home must meet lender and insurer requirements for safety, value, and condition.
• Future Goals: If you already own a home, consider how buying another will fit into your financial and lifestyle goals.

If you’re thinking about buying a home with a 5% down payment, it’s essential to have the right strategy in place. As an award-winning mortgage broker with TMG The Mortgage Group, I can help you understand your options, secure a pre-approval, and guide you through the process to ensure it aligns with your financial goals.

Contact me today to explore your possibilities!

PLEASE NOTE:

Mortgage rules and lender policies change all the time. Because Ryan has access to many lenders and has specialized expertise in structuring mortgage applications, he can determine the optimal way to structure your application to maximize the utilization of things like employment income, self-employment income, Canada Child Benefit income, disability income, maternity leave, down payment sources, credit issues, debt ratios, etc. Choice of lenders, combined with his experience, can make the difference in qualifying and/or qualifying for the amount you want. It’s not just about the best rate; it’s about flexibility and choices.

Understanding which programs you qualify for is only half the battle—figuring out how to integrate them into your mortgage plan is where the real work begins. That’s where I come in!

As a licensed mortgage broker with TMG The Mortgage Group in Regina, I’ll take the time to walk you through the eligibility requirements, application processes, and best strategies for using these programs to your advantage. Let’s work together to get you into your first home confidently and clearly.

Ready to take the first step?
Contact me today, and let’s discuss how we can make your first home a reality!