Are you wondering how much to put down on a mortgage down payment? Here’s my answer:
I had an interesting phone call with a client today who’s making an offer on a property, and the major part of the conversation was around how much should they make for their down payment. They’re going to pay roughly $390,000 for the property. They were thinking of putting $33,000 down, which is about 8%. And I said to them, “Listen, if you can put an extra $6,000 to get to 10%, it’s going to save you about $4,000 on your mortgage default insurance premiums.”
When you did the math, it worked out to about 56% return on investment, but it’s an instantaneous tax-free return. So if I had an investment for you, and I said, “Hey, you’re guaranteed to, you know, instantly get 56%.” Would you do it? Yes, you would.
Except there is one thing to consider. You don’t want to necessarily make yourself strapped for cash because there are lots of costs involved with moving and lawyers and, you know, buying blinds and furniture, all those sorts of things. But wherever possible, I always recommend putting more down. If you can get to 10% down when you’re close, do it.
Reach out to me if you have questions!
I have a great video on buying a home outside Canada too.
About Jason Scott, Edmonton Mortgage Broker
Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’ll be your trusted partner who will help you get the right mortgage for your family home or Investment property. I’m Jason Scott, and I’ll be your Mortgage Broker Edmonton.