What is a down payment?

What is a down payment? - RRSP Home Buyers Plan

www.ryanzupan.com Hi, Ryan Zupan here with City Wide Financial. Today, we're going to continue our series of talks on the basics of a mortgage & talk about down payment. Let's say I want to buy a 0K condo here in Vancouver. Well, most of us don't have 0K sitting under our mattress, ready to buy a home with, so I'm going to have to buy some money - I'm going to need a mortgage. But, I've managed to save a few thousand here & there & have K ready to put into the purchase of my home. That K of my money is my down payment. Down payment is the amount of equity you're putting into your home. So you have your down payment (equity) & your mortgage (debt). Down payment + mortgage = purchase price. The minimum down payment here in Canada is 5%. There are programs available where you can borrow that 5%. For down payments between 5-20%, you need to purchase mortgage insurance. I will discuss this in my next video, but you've probably heard the word CMHC used a lot lately, that's mortgage insurance. So, for down payments between 5-20%, you need to purchase insurance, so it will be a little more expensive for you. The last thing I'll talk about is, sometimes people are faced with the dilemma - should I save for a home or for retirement. If I max out my RRSP each year, that doesn't leave much extra to save for a down payment. The government has a program available for first time buyers, where you are allowed to use up to K from your RRSPs to buy a home. There are some ...