What's the smallest down payment needed to buy a home?

When looking to purchase a property it is important to understand the requirements to secure a mortgage. There are many factors that go into qualifying for a mortgage however the most common question people ask me is:

"How much money am I required to put down when purchasing?"

The answer to this question is based on a sliding scale depending on the value of the property that is being purchased.

If you are purchasing a property for under $500,000 you can put as little as 5% down.

If the property is selling for over $500,000 but under $1,000,000 the least amount you are required for a down payment is 5% on the first $500,000 and 10% for every dollar above $500,000.

For example:

Property for sale for $600,000 requires a minimum down payment of:

• 5% on the first $500,000 or $25,000 &

• 10% on the amount above $500,000 or $10,000

• For a total of 5.83% or $35,000

For any property that you are purchasing over $1,000,000 the least amount you are required to use for a down payment is 20%.

It is important to understand that if you are buying using less than 20% as a down payment you are required to get mortgage default insurance. The insurance premium will be added to the mortgage amount. To learn more about mortgage default insurance click here!

If you have any questions about a down payment or any other part of the mortgage process please feel free to reach out!

You can book a call directly into my calendar here.

I love to talk about mortgages!