Having the discipline to save a down-payment is great practice for owning a home and making mortgage payments on a regular schedule. So create the habit before you buy.
Here are a few important details to know:
- If you have less than 20% of the cost of the house to put down, Low Down Payment Insurance is required. Genworth or Canadian Mortgage and Housing Corporation (CMHC) make it possible (at an additional cost) to mortgage up to 95% of house purchase, premiums and conditions may apply.
- You can use money in your RRSP to add to your down payment. By taking advantage of Canada Revenue Agency's Home Buyer's Plan, you may be eligible to withdraw up to $25,000 tax-free from your RRSP. Your spouse or partner can do the same for a combined total of $50,000.
- There is a land transfer tax rebate: First-time homebuyers may be eligible for a rebate of up to $2,000 of the land transfer tax paid from the Ontario government.