When acquiring Mortgages with less than 20% down you must have Mortgage Loan
Insurance provided by either the Canadian Mortgage and Housing Corporation
(CMHC) or Genworth Canada.
Most times Canadian homebuyers save for a down payment, with certain lenders you
could put down as little as 5% of the purchase price which can come from sources
other than your own. These lending arrangements are subject to certain
restrictions based on income level and credit score.
The 5% down payment can come from borrowed funds such as a line of credit or
family member. Keep in mind that the amount borrowed for a down payment is
factored into debt service ratios which will establish how much you are eligible
The 5% down payment can come from a cash back feature of the mortgage. This will
mean that you will have to take the posted rate which is undiscounted required
by the lending institution.
In addition to the down payment, according to CMHC and Genworth rules you must
have 1.5% of the purchase price available to cover the closing costs including,
but not limited to, legal fees and disbursements, appraisal fees and a survey
certificate, where applicable.