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Down Payment Burden Emerges As Biggest Homebuyer Hurdle
It's a familiar dynamic: Mortgage rates in the US fell, prompting an uptick in refis but no accompan
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I’ve mentioned before that it’s very different in Canada. Shorter mortgage terms, closed and variable terms available), house purchases with 5% down (first $500k and 10% on next $1mill. The low down payment mortgages (less than 20%) need to be insured, at 4% fee (lowered fee at 10% down and up) which can be applied to the mortgage. Property values in some areas of Canada (Vancouver/Toronto) have been hammered, particularly pre construction condos, recently or just coming to completion, which in Toronto are down more than 20%, there are another 25,000 condos coming to market in Toronto this year.
Interesting times ahead for Canada.
One last thing, the province of Nova Scotia just came out with a program; 2% down payment on houses up to $500k with the province providing the insurance at no cost to the borrower.
It’s likely that employment uncertainty is also playing into suppressed home buyer interest.