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5 % Down Payment. In Canada, if the down payment on your new home is less than 20%, you are required to have mortgage loan insurance. This type of insurance is typically calculated as a percentage of your mortgage and is based on the size of the down payment …
Keep more cash liquid (pay for unexpected/immediate repairs, another down payment, invest) Take advantage of putting only 5% down now, since I will have to put 20% in the future (if and when I buy another property) 5% Cons: Pay ~$10K in CMHC Fees. Will take longer to refinance (~<5 years) Putting 20% down would allow me to avoid CMHC fees.
20% down with a monthly investment of $371 (difference in mortgage payments) for 25 years would have a final value of $218,193. 5% down would be $203,181 as mentioned in your post. The problem with this kind of comparison is that it will depend on the assumptions you use.
· · If this is the case, then a 20% down payment is best. This is due primarily to the fact that a 20% down payment allows you save more interest than the return you would make investing with a 5% down payment. 3. You Won’t Invest Your Down Payment Savings. The concept is similar to #2 above.
· · 20% Down Payment. Lastly, putting 20% down ($59,000) would make your PITI about $1,380. This larger increase is due to the fact of no longer having to have CMHC insurance. Over the 25 years, just over $60,000 in interest would be payable. Your break-even point in comparison to renting is only 2.4 years.
How the down payment affects the total cost of your mortgage. Save as much as you can for your down payment. The bigger the down payment, the smaller the mortgage, which can save you thousands of dollars in interest charges. Example: How the size of a down payment affects the cost of a mortgage. Suppose you buy a home that costs $400,000.
· 5% down payment ($25,000): $19,000. 10% down payment ($50,000): $13,950. 15% down payment ($75,000): $11,900. There’s no scenario where paying less than 20% upfront makes financial sense here. Bear with me: if you have $25k to use as a down payment, you will have to pay $19k more for you house, as insurance costs.
· Making a $75,000 down payment on a $300,000 home, you only save $500 per month compared to a zero-down loan. Drawbacks of putting 20% down…
· · In Canada, you have to put down a minimum of 5 percent of the purchase price. For example, if you bought a house for $400,000, you would have to put at least $20,000. However, if you want to avoid mortgage default insurance you want to pay at least 20% ($80,000 in this case).
· Down payment: 20%. In 2012, Rose C. quit her job to travel around the world for two years, and ended up making a fairly steady income overseas without incurring the usual consumer costs of …