Condo Down Payments in Canada – Fully Explained

When buying a condo in the dynamic Canadian real estate market, it is important to demystify down payments so that you can make informed decisions. 5% down payments are the entry point for first-time homebuyers, while conventional practice dictates that most banks require a 20% down payment for subsequent property purchases. This article will give you all the financial information you need to know throughout the condo buying process if you’re wondering how much to put down when buying a condo. 

Downpayment for Condo: A First-Time Buyer’s Step

The down payment for a first-time home buyer in Canada usually equals 5% of the purchase price. This first step into homeownership serves as a foundational step for those about to start their housing search.

When buying your first condo in Montreal, you will need to put down 5% of the price. If the condo costs between $500K and $999999,999, you will need to pay 5% of the initial $500,000 and 10% of the remaining amount. Owners of condos costing $1 million and more must pay 20%. This applies to all provinces and territories in Canada including Quebec.

How much is the Minimum Downpayment for a condo?

In general, banks require a 20% down payment when you are considering purchasing a second property, whether it’s for investment or a personal residence. Although there are exceptions for those with unique circumstances and life challenges, this higher percentage is a reflection of the perceived increased risk associated with multiple property ownership.

Can you put 5% down on a second home in Canada? – Exceptional Cases: 

If special circumstances arise, a 20% down payment may be waived. The bank may offer homeowners the opportunity to purchase a second property with a reduced down payment of 5% if they relocate next to family or friends for personal reasons and have to rent out their primary residence.

Montreal,Toronto and BC Downpayment for Condo 

Real estate markets across Canada are diverse, so it’s important to keep regional differences in mind. Down payment requirements in Montreal and Toronto are aligned with national standards. However, potential condo buyers should note that down payment requirements differ by region in British Columbia (BC), where real estate dynamics differ. For those who are navigating BC’s unique real estate landscape, consulting with a local mortgage broker can provide invaluable insight.

Calculate Downpayment for Condo: A Practical Approach

Depending on the purchase price and the specified percentage, it is possible to calculate how much down payment is required for a condo. For example, a first-time buyer eyeing a $400,000 condo would need a $20,000 (5%) down payment. However, if you purchase a second property, the requirement increases to $80,000 (20%).

In conclusion, a comprehensive understanding of condo down payments in Canada is pivotal for a seamless journey into homeownership. Whether you’re a first-time buyer embarking on the 5% down payment route or considering subsequent property purchases with a 20% requirement, being well-informed about standard percentages and potential exceptions ensures a confident stride into the dynamic realm of real estate.

This article is for informational purposes only. Always contact a licensed mortgage broker in your province before making any decisions. If you are in Quebec, feel free to reach out to me if you are seeking a mortgage broker. I can refer you to one of my top mortgage brokers, who can provide you with the lowest interest rates available in the market.