JUST FIVE PERCENT DOWN PAYMENT? CANADA MORTGAGE & HOUSING CORPORATION MORTGAGES AND THE FIRST TIME HOME BUYER CMHC is the housing agency of the Government of Canada. It is a Crown Corporation with a mandate to encourage the construction of new housing, the repair and modernization of existing houses and the improvement of housing and living conditions for Canadians. CMHC advises the Federal Cabinet on housing matters, designs programs to help Canadians in need get adequate housing and administers federal housing programs. CMHC also helps maintain a healthy and stable mortgage financing environment so that the housing market can effectively meet rental and ownership market demands. By creating and selling mortgage loan insurance products, CMHC increases the access of individual Canadians to home ownership, helps finance rental housing construction and helps the private sector to finance 100 per cent of social housing projects at competitive interest rates. MORTGAGE LOAN INSURANCE Under Canadian law, certain lending institutions cannot provide first mortgage financing in excess of 75% of the purchase price or lending value of a house unless the mortgage is insured. Buying a home is one of the largest financial decisions most people ever make. That is why it is so important to get the right financing. With a CMHC insured mortgage loan, your down payment can be as low as 10 per cent of the purchase price ...or just 5 per cent if you're a first time buyer. That means you do not have to put as much aside for the down payment, so you can buy sooner. How much do I have to earn to qualify for a CMHC mortgage loan? When you borrow more than 75 per cent of the purchase price of a home, you can finance in one of two ways: 1. You can take out an insured mortgage loan for up to 90 percent of the purchase price... or up to 95 per cent for qualified first-time buyers. In some cases, you may be able to assume an existing mortgage at better than current rates (although you may have to look at secondary financing to complete your purchase). TO BUY A HOUSE WITH A CMHC MORTGAGE FOR FIRST TIME HOME BUYER The minimum down payment is 5% up to maximum property values depending on the location of the property. Any one applicant must not have owned or bought a property in the last five years. It is important to note that there are many other conditions not mentioned above when applying for a CMHC mortgage. Your Real Estate Mortgage Broker can assist you by answering your questions and helping you apply for a mortgage as a first time homebuyer. CMHC FEES AND PREMIUMS You pay an application fee to cover the costs incurred by CMHC to review your application. Once your application is approved, you pay an insurance premium based on the size of the loan. This premium can be paid as a lump sum, or you can usually add it to your mortgage loan.