Introduction
Strategies for Buying Your House With No Money
Firstly, let’s teach you how to buy a house with no money or in the inflation-based housing market of Canada in 2022. Above all, some key things to know in this guide:
- minimum down payment
- home buyer plans & incentives
- different loan types
Home Buyer Programs, Plans, & Incentives
However, DO NOT buy home without taking advantage of Canada’s home buyer programs, plans, and incentives.
What is the Minimum Down Payment Needed to Buy a House
Likewise, the minimum down payment is the cash amount a buyer gives to qualify for a mortgage loan and buy a house. Moreover, it’s to offset the risk to the lender. For example, for a $200,000 house you can put a %5 down payment of $10,000 and get a loan for the remaining amount of the house price instead of paying $200,000 in full.
Down Payment Needed to Buy a House
| Home purchase price | Minimum down payment amount |
|---|---|
| $500,000 or less | 5% of the purchase price |
| $500,000 to $999,999 | 5% of the first $500,000 of the purchase price 10% for the portion of the purchase price above $500,000 |
| $1 million or more | 20% of the purchase price |
Buy a House Through Home Buyers Programs, Plans, & Incentives
Use the First-Time Home Buyer Incentive to Buy a House
As a result, the Government of Canada offers to a first-time home buyer a loan for
- 5% of the purchase price of an existing home
- 5% or 10% of the purchase price of a newly constructed home
You repay the loan after 25 years, or when you sell the property. In addition, you can also repay it at any time without a prepayment penalty.
Likewise, the repayment amount is set based on the property’s value at the time of repayment.
Buy a House – Home Buyers’ Plan (HBP)
To clarify, the HBP lets you withdraw a maximum of $35,000, tax-free, from your Registered Retirement Savings Plan (RRSP). Consequently, you must use this amount to buy or build a qualifying home. Further, you get 15 years to repay the withdrawn amounts.
Moreover, make sure you can repay without affecting your retirement savings. In addition, failing to repay will cause an income tax penalty. In conclusion, your RRSP will stop growing while your funds are withdrawn.
Finally, click here to learn more about down payments in Canada.
