What is the down payment for a house in Montreal?
You’ve been thinking about investing in a home for a few years now. Before you even contact a real estate broker in Montreal, it is important to have a sufficient down payment. Without one, it will be very difficult to get access to a property that meets your needs. In this article, you will discover the particularities of the down payment. I will outline:
- What is a down payment? ;
- How to save the capital needed to buy your property ;
- How to determine the down payment needed to buy a house in Montreal?
What is the down payment?
According to the Professional Association of Quebec Notaries, the down payment is the portion of the property purchase that comes from your savings. Before accepting a mortgage, banks will ask you for an amount of money. This is the down payment.
How to save for a down payment?
Set aside some money each week
Check with your bank whether it is possible to put part of your pay into a savings account. Depending on your risk profile, you can put your savings in an
- RRSP;
- TFSA;
- GIC – Guaranteed Investment Certificate;
- Exchange Traded Funds.
Ask a family member for a donation
To top up your stake, you can receive a donation from a parent or relative. Your relatives can also sell you their property and donate the equity..
Use Your RRSP
With the Home Buyers’ Plan, it is possible to use some of the funds in your RRSP. You can use it up to a maximum of $35,000, tax-free, to buy your home in Montreal. To be eligible, you must never have been a homeowner or not have been one for more than 5 years.
How much of a down payment do I need to buy a house in Montreal?
It all depends on the value of the property and the type. The amount is not the same if you want to buy a condo or a quadruplex.
Down payment for a single-family home, condo, flat or duplex.
If the price is less than 500 000$, you will be asked to put 5% of the amount. To buy a condo on the Plateau-Mont-Royal sold for $450,000, you would have to put in $22,500. The mortgage would come to $427,500.
When the price is between 500 000$ and 999 999$, the calculation differs. You will have to pay 5% on the first $500,000 and 10% on the remaining amount.
Finally, in the case of properties priced over $1,000,000, you will be required to put 20% down as a down payment. To acquire a beautiful house in Outremont, sold at 3 000 000$, you will have to put 600 000$.
Down payment for a triplex or quadruplex.
If the price is $500,000 or less, you will usually have to pay 10% of the purchase price. In the case of this type of property, additional costs must be considered.
If the price is less than $1,000,000 and more than $500,000, you will have to invest 10% of the price.
To purchase a triplex costing more than one million dollars, you will have to put 20% down.
Is mortgage loan insurance compulsory?
It depends on the down payment made. If the down payment is 20% or more, it is not required. If you put 20% down and meet certain conditions, your loan can be automatically guaranteed. In short, you save money, since you don’t have to take out insurance, and you save time.
Want to buy a house in Montreal? Contact me.
For over 20 years, I have helped thousands of individuals buy their home in Montreal. Whether you’re a first-time buyer or not, working with me means peace of mind.
From the property search to the signing of the papers at the notary’s office, I will be there. I will defend your interests so that you can quickly find your home at the best price. I invite you to click here to view my properties or contact me to schedule a call.
